Beware of Expensive Premiums for Payment Protection Insurance
Research from www.uSwitch.com Personal Finance reveals that consumers could be paying an additional 38% in PPI on top of initial loan repayments.
(PRWEB) October 23, 2004 -- Consumers opting for one of the best loan rates currently available could be paying over 4,400 in Payment Protection Insurance (PPI) on top of their personal loan repayments.
The research from independent comparison and switching service uSwitch.com Personal Finance reveals that the cost of PPI among the top 15 personal loan rates varies considerably from Cahoots 1,205 (or 10% additional cost on top of repayments) to the Bank of Scotlands 4,424 (38% on top of repayments).
15 Best Buy Personal Loans - ranked by Typical APR
Loan Product Typical APR Total Cost without PPI Total Cost with PPI Cost of PPI Additional Cost % (over initial repayments)
Northern Rock Fixed Personal Loan 5.6% 11,450 14,276 2,826 24.7%
Cahoot Fixed Personal Loan 5.7% 11,476 12,681 1,205 10.5%
Abbeyloan (Internet Only) 5.8% 11,503 13,146 1,643 14.3%
Alliance & Leicester Fixed Personal Loan Internet 5.8% 11,503 13,512 2,010 17.5%
Lombard Direct Fixed Personal Loan (internet only) 5.9% 11,529 14,360 2,831 24.6%
Liverpool Victoria LV Personal Loan (Internet) 6.0% 11,555 13,242 1,686 14.6%
Smile Fixed Personal Loan 6.0% 11,555 14,408 2,853 24.7%
Direct Line Fixed Personal Loan Internet 6.0% 11,555 14,401 2,845 24.6%
AA Fixed Personal Loan (Internet Only) 6.1% 11,582 15,172 3,590 31.0%
Bank of Scotland Personal Loan 6.1% 11,582 16,006 4,424 38.2%
Co-operative Bank Personal Loan (Internet) 6.1% 11,582 14,441 2,860 24.7%
British Gas Fixed Personal Loan (Internet Only) 6.2% 11,608 15,207 3,599 31.0%
Marks & Spencer Personal Loan (Internet) 6.2% 11,608 13,623 2,015 17.4%
Marbles Fixed Personal Loan 6.3% 11,635 13,729 2,094 18.0%
Tesco Fixed Personal Loan Online 6.4% 11,661 13,538 1,877 16.1%
Data provided by www.uSwitch.com Personal Loan Calculator. Correct as of 7 October 2004
Note: comparison based on: 10,000 Unsecured Personal Loan, 5 year repayment period, 15 Loans by Typical APR.
Paul Schofield, Head of Personal Finance at uSwitch.com comments: The main issue surrounding payment protection insurance is that it is an expensive product which can often send a market-leading loan tumbling to the bottom of the rate table. There is an enormous disparity between the PPI offered by different lenders, charges are presented in an ambiguous way and customers often feel under pressure to purchase PPI direct from their loan provider without realising the alternatives.
uSwitch.com is a free, impartial online and phone-based comparison service which helps consumers compare prices on gas, electricity, home telephone, digital television, credit cards and loans. Our aim is to help customers take advantage of the best tariffs and services on offer from every supplier. The company has developed a set of proprietary calculators that evaluate a number of factors to advise customers on the best deal to suit their individual needs.
The service is also available via telephone, fax and post. Consumers can call on 0800 093 06 07, fax 020 7233 5933 or write to Customer Services, uSwitch.com, 10th Floor, Portland House, Stag Place, London, SW1E 5BH.
uSwitch.com is not a supplier but acts as an independent advisor, giving customers an impartial view of whats on offer. Unlike traditional brokers, it compares prices from all suppliers, not just those it has a commercial relationship with. The service is based on the most up-to-date information provided by the supplier companies and industry regulators.
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