Borrowers ‘should be cautious of automatic PPI charges’
Personal loan customers are being advised to beware lenders who automatically add payment protection insurance (PPI) on to their borrowing.
According to Which? Money, more than half of lenders questioned automatically included PPI into their quotes.
However, the consumer watchdog warned that as the insurance is not always necessary, borrowers could actually find the cost of their monthly personal loan repayments increased.
Martyn Hocking, editor for Which? Money,said: "If you’re taking out a loan, make sure you know if the quotes you get include PPI – it’s not compulsory so if you don’t want it, ask the lender to remove it."
He also suggested that income protection insurance could be a better option for most consumers.
Statistics released by financial charity Credit Action reveal that Britons borrow some £360 million every day.
About £36 million is lent out via unsecured borrowing such as personal loans, credit and store cards, with Secured Loans totaling some £324 million.
Interfinancial providing you with breaking personal loans news.
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