Getting your loan protection quote online is the easiest and cheapest option for protecting your loan or credit card repayments each month. A policy would provide you with a lump sum of money which is tax-free if you should become unemployed or suffer from accident or illness that meant you could not work. It is also one of the best ways to make sure that you understand the product, as standalone providers will always provide you with the information you need. It is only by shopping around and comparing different premiums and the policies themselves that you can find a policy that will not break the bank.
If you take your loan out online then when applying for it, you have to check to ensure that loan payment protection has not been included when you filled in the online form. Some providers were found to be using a system which required the consumer to remove the tick from the box if they did not want protection. This of course, confused many and many people bought their loan with cover included. With the intervention and investigation of the Financial Services Authority and the Office of Fair Trading in 2005 many lenders selling loans online had to change their ways. However it is worth considering and checking when borrowing this way. A loan protection quote taken with the high street lender can also mean that you payout too much for cover. Some lenders will add in the cost of protecting the loan before adding interest so you are paying interest on the protection along with the borrowing.
Of course comparing loan payment protection is essential if you are to get the cheapest cover. However it is also important that you check the conditions of cover as the terms vary. For example some providers will offer you a policy that would payout for 12 months and some could offer cover which would provide you with a payment each month for 24 months. There is always a waiting period before the protection would begin. You could have to wait 30 days or it could be as long as 90 days. You also have to be aware that some providers would backdate their cover to the first date of you being out of work or of being incapacitated.
Protecting your borrowings should be seriously considered, as if you were to get behind on the repayments and they mounted up, your lender could take you to court. If you were taken to court then you could be given a County Court Judgement and even have your possessions taken by bailiffs to make up what you owe the lender. In almost all cases your credit rating would be affected at the very least and this is important in the future if you wish to borrow again. Your credit score is what all lenders take into account when deciding how big a risk you are. However you easily avoid all of this by keeping up your repayments while recovering or finding working again with a policy after obtaining a low cost loan protection quote.
Simon Burgess is Managing Director of the award-winning British Insurance , a specialist provider of loan protection quote .