PPI Cheque

Everyone knows the big banks have been makng a fortune out of mis-selling Payment Protection Insurance policies. Payment Protection Insurance (PPI), or Loan Insurance is an insurance policy commonly sold by the banks and finance companies at the time of applying for a loan, car finance /car loan, or credit card. It can also be sold at the time of applying for a mortgage. PPI is likely to have been sold to you when you applied for a personal loan and the cost of the policy (which can be up to 40% of the amount you have borrowed) is usually added to your loan, which means you incur further interest. This is a very expensive way of funding the policy and it is highly likely this was never expained to you. The main problem with PPI is that many people don't really need the policy they have, or the many exclusions in the policy mean they can't claim at all. It can also be very expensive, yet, because the premium is usually added to the loan, the cost was, until recently, often hidden.