What is a loan security?

There are always a few basic things to repeat when considering or considering a loan: Think carefully about the loan, compare it before making your choice, and make sure you can repay the loan. We, too, have written an entire article on what to remember when applying for a loan.

Consumers are expected to be able to forecast the development of their own economy with the utmost precision. However, sometimes it is very difficult. What if everything in life goes wrong? What if I become unemployed? What if I get seriously ill?

As a result, many lenders have introduced a variety of additional services into their service offering, which can help reduce the risk involved in borrowing.

What is a loan security?

What is a loan security?

Loan protection (or, more commonly known as payment insurance or repayment insurance) is a type of insurance offered by many lenders that provides the borrower with insolvency protection in accordance with the terms and conditions. It is particularly popular with home borrowers, but it is also offered, for example, for consumer loans.

There are many types of loan security. The most comprehensive loan insurance policies can cover, inter alia, reduced ability to pay due to death, unemployment, disability, illness and permanent disability.

In contrast, for example, Goodbank focuses mainly on collateral loan, which secures loan repayment in the event of death. Nordea again offers a package where you can choose the most appropriate types of security for yourself: death, disability, etc.

The terms of loan security vary

The terms of loan security vary

Comparing loan security can be challenging, as lenders offer very different packages. For example, Credit offers different types of payment insurance for aged people 18-64 than for aged people 65-75. While for young people, loan security replaces total disability or involuntary unemployment, it provides protection against, for example, robbery and hospitalization.

If you are considering securing a loan, be sure to take the time to review the terms and conditions. It is of utmost importance that you always read the terms and conditions carefully! Account must be taken of the diversity of conditions. For example, some conditions may apply only to employees and some may apply to both employees and self-employed persons. The terms may also state, for example, that insurance can be obtained if you have been in an employment relationship of indefinite duration with the same employer for at least 7 consecutive months immediately prior to taking out the insurance. You must not have prior notice of termination or notice of termination.

The terms of compensation must also be read carefully by everyone. Benefits may not be paid, for example, for unemployment due to seasonal unemployment, probationary or fixed-term employment.

Consumer credit loan collateral in comparison

Consumer credit loan collateral in comparison

We have compared the terms of payment security for a few consumer loans.

The comparison is not a complete cross-section of repayment protections. If you are considering a payment insurance, you should read the terms and conditions of the loan providers separately.

 

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