Archive for the ‘Getting the Most From Your Bank’ Category

Hidden Junk INS Fee

Perhaps you are wondering what junk fee your bank may have added to your personal loan. Most consumers are not even aware that their bank may be adding in, credit life and disability insurance into the loan that they are applying for. How is that you ask? Did you read the all of the print or just look at the dotted line and sign away because you didn’t want to rock the boat now that you finally got your loan. SHAME ON YOU! It is the policy of most banks to include this coverage, a hidden fee in your loan. While it is really not so hidden in the contract, it just happens to be  one of those little places on the loan agreement that needs your initials.

A credit insurance policy on a loan for the life of the loan with disability policy is one that guarentees the bank repayment  for any unpaid portion of the debt concerned in the event that customers death or disability. While it is perfectly understandable that the bank would like to secure this “minimal” monthly insurance fee, for you the customer it may not be the best deal, especially if you are under 50 years of age. Not that 50 is old mind you but that the likelihood of death or a disability occurring is rather low. However for the banks peace of mind, it protects the bank from losses, at a cost to you.

If you have an excellent repayment history, and your credit is viable why incur more cost to yourself on a monthly basis? Listen if you are insured with a life insurance plan that will cover all your expenses upon your death, and still provide for your family, if you have one, then don’t buy this “extra insurance”. Read your contract closely before signing. IF you find that there is a fee that you do not understand have the bank loan officer explain it to you FULLY.

I know there are those people, who evaluate every possibility of occurrences in life, and is willing to pay out more each month to protect against any undo liability that may be owed at the time of death or disability that may arise, to you I say buy whole life insurance, at least when you grow old and its is paid off you can borrow against, or cash it out, and it is an investment that you live off of rather than supply the bank with peace of mind that they loaned you money.

Perhaps what makes this such an issue is the way the bank writes this insurance into the loan, (MORTGAGE INSURANCE IS A DIFFERENT ANIMAL), such an irritating one is, that it is usually treated as if it part of the loan obligation, and as such the bank will also charge interest on the premium payment on top of loan request. But wait, that isn’t the entire reason that the bank includes this protection, they also receive a commission for writing the policy.

Your loan officer will seldom reveal the insurance added into the loan agreement. You must read your paperwork. Once you have located the insurance within your document, you can address it with your loan officer. Seldom is a consumer loan dependent, upon the the customer of having or their loan be contingent upon the this insurance.Please understand most loans are not dependent in you accepting to pay for this credit life and disability insurance policy.

Why haven’t you heard this before, well how often do you read all of your loan agreement before signing? If you don’t question it then the loan officer has your initials agreeing to this insurance.

So take time to read your loan documents, you could save yourself a lot of money, and the bank will just have earn the interest on the amount of money you are borrowing, and not capitalize on your loan without you understanding or being aware that they may be adding to their coffers more generously than you had understood.