Loan Payment Protection

Personal Loan Protection (PLP), including secured loan insurance and unsecured loan insurance, is one of the most common forms of payment protection. It's also one of the most expensive.

This kind of loan payment protection can be sold with just about any loan. Secured loan insurance is tied to an asset, usually your home. Unsecured loan insurance does not require this kind of security.

You might have purchased loan payment protection when you signed up for a loan to buy a kitchen or a car or to consolidate your debts. You could also have purchased it as credit card payment protection when you applied for a credit card. You might not even know you have Personal Loan Protection (PLP) insurance but be paying for it all the same.

This kind of cover can add a staggering amount to the total size of your debt. Moneyfacts data has looked at hundreds of cases and revealed the astonishing cost of loan payment protection. On one loan of £5,000, for example, the payment protection insurance premiums totalled £1,300 - over 20% of the total loan.

So should you have looked more closely at the terms and conditions? Not necessarily. If the costs of PLP were not made clear to you when you took out your loan, you may have a claim for mis-sold loan protection. If you have, call on us.