Do I really need to insure my loan?

Q I have accumulated debt from a number of credit cards and loans since moving to London seven years ago. Following advice from my bank (Clydesdale) I consolidated all this debt into one personal loan.

This totals ?28,147 (paying ?370 per moth over 72 months).

When I took out this loan I thought it best to take out payment protection insurance (PPI). I have now looked at my loan and noticed that this PPI totals ?6,115 of my loan.

I think this is an excessive amount to have to pay, and would rather take my chances on not being sacked. Do I have any recourse to saying to my bank that I do not want to continue paying this premium and wish to restart my loan without payment protection insurance?

SB

A You might never be sacked but what are your chances of being long-term sick or disabled? Although it seems that you are paying a rather high price for payment protection insurance, you can't legislate for the future. Now that you already have a contract, think hard about how you would repay debts if you were unable to work.

If you are still keen to end this agreement you have a number of options. Lenders are supposed to separate out the total credit charge from the fee for your payment insurance. If your lender did not do this then it might make the contract null and void.

You need to get a copy of your loan agreement and either take it to a money advice specialist at your local Citizens Advice Bureau, or fax it to National Debtline who will take a look at it for you.

Sophie Brookes of National Debtline says: "If you have a secured loan - in other words the debt is secured against your own home - then you need to make sure you could repay the monthly installments. Otherwise your property could be at risk."