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APR on Insurance on personal loan


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Hi Guys,

 

I am a newbie to the forums, and was wondering if you may help me, i toke a loan back in February 2009 for £6,000 and was sold insurance for my loan and got the following on my agreement:

 

Amount of credit (the cash loan): £6,000

Amount of credit (the insurance loan): £923.52

Total amount of credit (the total loan): £6,923.52

 

Duration of loan: 24months

 

Total amount you pay for cash loan: £7,005.60

Total amount you pay for the insurance loan: £1,078.08

Total amount you pay for the Total loan: £8,083.68

 

APR for cash loan: 13.9%

APR for insurance loan: 13.9%

 

 

Guys is this normal for them to charge an additional 13.9% on the insurance side? The amount I pay back for insurance is more than the actual loan i really don't get this. Any advice will be much appreciated.

 

Apologies if I have placed this thread on the wrong section of the forum.

 

Thanks,

 

TA

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Hello and Welcome, Tuffy1985.

 

I'll move this thread to the Insurance Forum, not sure if thats the best place for it, but I'll move it again if you get no joy.

 

Regards.

 

Scott.

Any advice I give is honest and in good faith.:)

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Sounds very expensive to me. Over £900 to Insure a loan of £6k over only 2 years and then they charge 13.9% interest.

 

What is the Insurance for exactly and how was it sold?

 

If you check some of the comparison sites, for protection Insurance to cover loans, you will find that you have been ripped off.

 

Appears to be case of PPI being mis-sold to me. If this is the case, ask the mods to move to the relevant forum.

We could do with some help from you.

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To answer your original question yes it is quite normal on some agreements to add interest to the insurance, teh reason been that the insurance premium (on your type of loan) is payable on Day 1 and in full, so you have borrowed the premium as well as the amount of the cash loan.

 

Not all loans work like this, but some do and you have one that does.

 

I'd agree that £923 insurance on a £6000 loan is expensive though.

 

Mossy

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