A Quick Guide To Loan Protection Exclusions
Loan protection has been in the news a lot recently as a result of consumer accusations that the providers of loan protection are simply ripping off consumers to profit rather than assessing what is in their best interests. Company Tax 2011
This may sound like a wild claim until you are presented with the evidence.
The finance industry regulator Company Tax 2011
the Financial Services Authority has in fact found that in some cases loan protection policies were being sold to individuals who could never benefit from them because they would not be eligible to claim should they find themselves out of work as a result of sickness or unemployment.
There are a variety of reasons why someone would be unable to benefit from or to claim on loan protection, Company Tax 2011
and all of them are contained within the small print, or the terms and conditions. Company Tax 2011
It is therefore important that a consumer reads this information before taking the loan protection out.
Although every individual policy will have its own set of exclusions, and they largely depend on the company, there are some generic ones that all loan protection policies have. Company Tax 2011
The first is that you have to be between 18 and 64 to claim on the majority of them. Any older than that and you are no longer deemed to be of working age. Company Tax 2011
Some do not include this condition now as a result of the act against age discrimination, but it is still worth looking for or asking about.
You also have to be working on a full time basis to be able to claim on loan protection. Company Tax 2011
If you work less than sixteen hours a week or no longer work then you cannot claim. The whole idea behind loan protection is that it enables you to maintain repayments if your income is dramatically reduced. However, Company Tax 2011
if you are not working to begin with or are not the main wage earner then it could be argued that your debts should not be affected.
Of course these are only two of the exclusions associated with the terms and conditions of loan protection, Company Tax 2011
but already you should have an idea as to whether you qualify for it! Be sure to read all of the terms and conditions and take independent advice if necessary and you will not go far wrong!
Representative APR 391%. Average APR for this type of loans is 391%. Company Tax 2011 Let's say you want to borrow $100 for two week. Company Tax 2011 Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. Company Tax 2011 If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.
Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies.(Company Tax 2011 ) Non-payment of a payday loan might negatively effect your credit history. - Company Tax 2011
