Payday Loan: how it works, what it covers, how much it costs and reimbursement calculation
All useful information regarding Payday Loan insurance. Let’s find out how this insurance policy works and why it is advantageous to choose it when we request financing. So let’s see what the Payday Loan insurance covers and how much it costs. Finally, how to calculate the repayment based on the characteristics of the loan.
Payday Loan Insurance 2019: how does it work, is it mandatory?
A very important aspect related to Payday Loans 2019 is that of the insurance that can be stipulated at the time of the request. As you know, insurance is a contract that allows the customer who signs it to protect himself in case certain unpleasant events occur. The most common is, for example, that of the car, in which the insurance takes care of paying damages in the event of accidents. How does Payday Loan insurance work? Also in this case, by stipulating the insurance contract, the beneficiary of the loan will be protected in case of events due to which it is not possible to pay the repayment installments agreed upon by the fixed expiry date.
The customer obviously wants to avoid any kind of problem in payments, but at the same time the bank has every interest in minimizing the risk of insolvency. For this reason a characteristic of Payday Loans insurance is to be advantageous for both parties. It is no coincidence that the banks are the first to propose insurance policies linked to their loans. The first question that is good to answer is: is Payday Loan insurance mandatory? If you are wondering this the answer is absolutely no. Although many companies are particularly insistent on this subject it is good to clarify once and for all that the classic Payday Loan can be requested even without entering into an insurance contract. Does this mean that the cost of insurance is an unnecessary expense? Even this statement is wrong, since as we will see in the next paragraphs there are several reasons why it is convenient to ensure its financing.
As for the practical aspect and therefore how the loan insurance works, everything is very simple. At the time of requesting the loan, we are offered the possibility to take out an insurance policy, which can cover different types of risks. According to our personal data and the characteristics of our loan, the insurance premium will be defined, which we will have to pay. Thanks to the insurance on the loan as we have already said we will be protected in case of certain events. In particular, if due to one of the events specified in the insurance contract we were not able to complete the reimbursement, it will be the insurance company that makes the payment of the installments for us. Each company defines the type of reimbursement that will be made based on the event that occurs. For this reason, our recommendation is to carefully read all the points of the contract before signing, so as not to have unpleasant surprises later.
What does the loan insurance cover: reimbursement based on events
After seeing in general how the loan insurance works we can move on to analyze what covers this type of insurance policy. As we have already said, Payday Loan insurance comes into play if certain particularly unfortunate events occur which make it impossible for the client to complete the repayment. What events does Payday Loan insurance cover? The first event that is considered is the death of the beneficiary of the loan. In the event that the applicant has not insured his loan, the lender obviously can not afford to lose the capital invested. As a consequence, the heirs will be responsible for the residual debt. Thanks to the Payday Loan insurance, there will no longer be this danger. In the event of death, in fact, there will be no reimbursement calculation, since all the missing installments will be paid by the insurance company.
Another event that is covered by the loan insurance is the total and permanent invalidity of the applicant. In the tragic case in which the client remains 100% disabled he will be protected by the insurance company. In this case, in fact, the calculation of the reimbursement that will be made by the company is given by the sum of all the installments that are missing at the end of the term of the loan. On the contrary, the case is where the inability is not permanent but temporary. For example, if you are struggling with an illness or in the event of an accident, we will not have to worry about paying the repayment installments of our loan through personal insurance. In this case, however, the service offered to us by the insurance company does not consist of the payment of all the missing installments, but only of one part. The calculation of the reimbursement that will be made in our place will be the result of an analysis of the recovery time of our health condition. Usually the period covered by the insurance in the event of temporary disability is one year or two years at most.
Possible events that are usually covered by Payday Loan insurance are not exclusively about the health of the applicant. Another reason why it can be problematic to complete the reimbursement according to the set deadlines is the possible loss of work. Even in this case, although it is not a tragic event such as those considered so far, it may be advantageous to have taken out an insurance policy for our Payday Loan. For those who lose their jobs, the insurance company will pay the repayment installments until the client has found a new job, generally up to a maximum of one or two years. It is good to underline that the insurance will only be paid by installments in the event of involuntary unemployment : this means that if for any reason the customer himself is to resign, no refund will be made by the insurance company.
How much does the Payday Loan Insurance cost?
So we have seen how the Payday Loan insurance works and what it covers, with the events that are usually considered in the policy contract. At this point it is good to check how much it costs to see if it is convenient or not and therefore whether to pay this additional cost related to the loan. It is good to specify that it is not possible to determine a general cost to secure a Payday Loan, since the amount that will be required to protect us from any type of event will depend on many factors. Among these is the choice on our part of the events that we want to include in our policy. This is because for example there are insurance policies that exclusively consider the risks to the health of the beneficiary of the loan, and therefore we will choose whether or not to include the payment of installments in our place for example in the event of dismissal, based on what we consider this possibility “dangerous”.
It should however be said that in general the cost of insurance on a loan will not be absolutely negligible. This is because, as we have seen, the expense that must be faced by the insurance company in the event of death, disability or dismissal is a rather important expense, from which the company wants to protect itself. If considering the cost and the desire to save on the cost of financing you could choose not to pay Payday Loan insurance, we must also consider all the advantages we have described above. For this reason, before choosing is obviously good to take a look at the costs, but we must also consider how it could be useful to protect ourselves. What does the cost of insurance depend on? The parameters that determine the cost decisively are the duration of the loan and the age of the financed subject.
Obviously an older customer will pay a higher insurance premium than a younger one, as the cost will increase as the duration increases. Paradoxically, when the cost is a bit ‘higher, it is precisely the case in which it is advisable to secure your Payday Loan. This is because for a short-term loan and for small amounts insurance is not too important, since the risk is minimal. For loans with a five-year or ten-year duration, although the cost is higher, the risks are greater, and therefore an insurance contract may be required. Furthermore, we must consider that the cost of insurance is in some way financed. The insurance premium that we will have to pay will be spread over the entire duration of the loan, increasing the amount of the monthly repayment installments but without creating a major problem at the time of repayment.
Best Payday Loans 2019 with Insurance: who to contact to get them
To conclude our detailed analysis of the loan insurance, let’s see what are the best personal insurance loans available for this 2019. As we have already said, all credit institutions are a little bit to propose to insert an insurance policy associated with the our Payday Loan. This is because, thanks to insurance, the company is also protected. Among the major banks and financial institutions to which we can apply to receive a Payday Loan with insurance is Ultranix. We have spoken several times in our website about the convenience of the products offered by this company, which therefore offers us the possibility of adding insurance on our financing. To immediately know the costs of the insurance policy that will be offered to us just ask for a free quote online. In particular, by checking or removing the check from the insurance box, we can easily compare the two different cases and evaluate, on the basis of the cost, whether or not to secure the Ultranix loan.
Another credit institution that allows us to do the same thing through its website is Astrofinance. Astrofinance Payday Loans allow us to receive up to € 60,000, a very high sum of money. For this reason, even considering the duration that can go up to 96 months, it may be advantageous to add insurance on the loan. Also in this case just check the box relating to insurance and in a click you will be presented all offers and Payday Loan Astrofinance with the monthly payment which will obviously include the cost of the insurance premium.
Among the best banks in circulation, we point out then InDirect. Through the company’s website it is possible to proceed with the calculation of the online estimate for the Blue Loan. To do this, we will ask for the characteristics we are looking for for our financing, and therefore the amount and duration. Subsequently, once the profession has been specified, we will be asked to add the personal loan insurance offered by Axia. These are just some of the main companies that allow us to immediately evaluate all the costs related to our financing, without any surprises at the time of the request. As we have repeated several times it is good to carefully consider whether or not to include insurance on our Payday Loan, as if it is true that it represents an additional cost is equally true that it could somehow “save us” in case of events that obviously nobody wishes happen but from which it is good to protect yourself beforehand.