What is...

Payment Protection Insurance (PPI)

Payment Protection Insurance (PPI) is an optional insurance policy made available on credit applications that will cover your repayments for a limited period if you have an accident, fall sick or become unemployed. More recently, it has become better known for the mis-selling scandal which resulted in huge pay-outs being made to millions of UK consumers.

While the insurance itself can be helpful to some customers, in many cases there is a wait period before the payments come through on policies, meaning it can be as long as three months before they start to cover your finances in the event of you becoming unemployed or ill for an extended period, by which point many people no longer need the cover.

Opting to take this insurance will not affect your chances of getting credit (by law), and you should not feel pressured into taking it up at any point.

The deadline to claim against mis-sold PPI was in August 2019.

Can you still get PPI on a loan?

Payment Protection Insurance is still available when you apply for a loan, but new regulations make it much clearer for you to see what you’re opting in to.

How was PPI mis-sold?

There was no single way that PPI was mis-sold to customers. For some, customers weren’t fully informed what they were buying into or were sold it even though it wasn’t suitable for their circumstances. In the worst cases, customers were misled into thinking that they would not qualify for a loan without including PPI on the policy.

How do I know if I have had PPI?

If you still have the original copy of the loan agreement, it should include any details of PPI and additional costs associated with it. Sometimes it is referred to as “accident, sickness and unemployment insurance”, “loan insurance”, “protection plan” or ”loan care”. Information related to insurance taken out on loans will not appear on your Credit Report, but information about the loans themselves will, provided that they have been active within the past six years.

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