Personal debt is constantly on the rise in the UK with more and more people falling behind on their loan repayments. This leaves them with monthly accumulating debt, failing to repay instalments on a loan can also affect a person’s credit rating which will affect their future chances of obtaining mortgages and other types of loans. On top of these financial problems, failing to repay a loan for whatever reason can cause personal problems, distress and even depression. Failing to repay a loan because of bad financial management is one thing, but it is highly stressful if a person is unable to repay their monthly instalments because of illness, injury or being made redundant by their employer as most of the time the person has no way of protecting against these unfortunate incidents from occurring.
There is a way a person can protect themselves financially if they lose income due to one of the above reasons, taking out loan insurance can help with the monthly repayment costs of a personal loan or mortgage. Loan insurance policies are available from most high street lenders and specialist online companies, you can even ask for loan insurance from the same company as you have had the loan from. Due to the competitiveness of the loan insurance market, it is important to shop around and find the best deal which will suit your needs exactly. Loan insurance can be expensive in some cases so just because you received a low interest rate on your loan, don’t expect to get cheap loan insurance from the same lender.
Loan insurance will protect a person from the cost of their loan repayments only. To work out how much loan insurance you require it is important to add up all of your monthly repayment costs from existing loans and quote that figure to the lender, you will then be protected against that figure if you are unable to earn a living.
If a person is unable to work, it is very unlikely that income support or job seekers allowance will add up to what they used to earn whilst working, making living, let alone loan repayments very difficult. Nobody knows what lies around the corner and no one is invincible, but at least with loan insurance people have the piece of mind that they will not get into impossible debts due to circumstances which could not have been helped.