How much will it cost to protect your home?
When you apply for loans secured on your property, you're taking a big risk: if you can't make the repayments, you could lose your house. Insurance can protect you from the risks of illness or unemployment, but it adds a hefty amount to the total cost of borrowing.
Loans secured on property offer low interest rates, but there's the constant risk of losing your home if you can't afford the repayments. For most people the reason they fall behind in payments is due to serious illness or redundancy; payment protection insurance can cover those risks for a fee.
Most lenders offer protection for loans secured on property, and the cost of the insurance is usually expressed as a figure per £100 of cover. For example if you take out loans secured on your property with Abbey.com, you can protect yourself from the risks of accident, illness or unemployment for £6.04 per £100 of cover. On a £1,000 loan you'd pay £60.40; on a £5,000 loan the figure would rise to £302.
One thing to watch is that many insurance schemes have a minimum and maximum payment per month; in the case of Abbey the minimum is £100 and the maximum £2,000, or 50% of your monthly gross salary – whichever is lower.
loans.org.uk helps you find the best loans companies for your specific needs, and gives you background information on the various types of loans available in our loans articles, more loans articles and still more loans articles.
If you can't find what you want on loans.org.uk, be sure to check our loans homepage.