The Money Stop

Consumers could save themselves large sums of money by seeking a better deal on their payment protection insurance (PPI) for a personal loan.

That is according to the Post Office, which says some borrowers may find that they could save thousands of pounds.

The firm points out that PPI that is sold alongside a loan is normally added to the total sum of the amount borrowed, meaning the consumer will pay interest on the insurance.

Customers are now being urged to challenge their lender and could find that they receive a refund for the interest charged.

“The refund could be substantial, so people shouldn’t miss out,” said Claire Oldstein, head of communications at the Post Office.

“Banks and loan providers are in an ideal position to sell insurance with their loans, but customers should challenge them to find out what the true cost of their payment protection is.

“By comparing this to standalone policies, customers can see for themselves that better value deals are available,” she added.

The Post Office has recently called for an open PPI market in response to an investigation by the Office of Fair Trading.

The organisation wants it to be mandatory that consumers are told by lenders that they can get better or cheaper policies by shopping around.

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