What is Payment Protection?

Payment Protection is essentially an insurance by which you pay extra with your loan repayments so that in the event you were unable to make the repayments on a loan in the future due to redundancy, sickness, or even an accident at work, your repayments (subject to certain exclusions and terms) will be made for you directly by the insurer. 

However it is important to stress that Payment Protection Insurance schemes do not cover you for all eventualities. Schemes often won't cover you for pay cuts or pregnancy.

Payment Protection Insurance can be very expensive and could add 2,000 to the cost of a 7,500 loan. You should always check whether their repayment costs include PPI, and think very carefully about whether you really need it.

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