Demystifying PPI
What is PPI ? How does it work? And what does it even stand for?
Starting with the easiest question first, PPI stands for payment protection insurance, although you may also hear it referred to as credit protection insurance or loan repayment insurance. The intent of PPI is simply this – to protect a loan holder from financial ruin if they are unable to make payments on a loan due to specific circumstances. Circumstances that are covered under PPI policies typically include inability to work due to accidents, illness, death or loss of job. Consumers can purchase PPI alongside mortgages and auto loans as well as credit cards and other types of loans.
If a policy holder finds himself unable to make a loan payment, he then files PPI claims against the policy. In the case of accident or illness, payments are covered until the policy holder is able to return to work and start earning and income again. In the case of job loss, payments are covered until the policy holder secures another position.
PPI can be extremely valuable and a true lifeline in times of personal and financial crisis. However, it can also be detrimental if it is not properly administered by the lender or understood by the consumer.
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What Does A Debt Management Plan Entail?
Once you’ve chosen a organization, or company to help you with a debt management plan, there are several things you will need to do. Generally, the very first step will be to compile a complete list of all of your creditors and the exact amounts that is owed to each one.
After you’ve gotten a complete list, the next step will be to combine your total income and a list of all of your monthly expenditures. Your expenses will include payments such as a rent or mortgage, auto payment, auto insurance costs, utility payments and other living expenses.
An agent with the organization will then help you to determine the maximum payment amount that you can afford to make each month. In some cases, the agent will also attempt to have your interest either excluded or lowered during the time of the repayment plan. And, may even get your balance lowered.
When all the details have been agreed upon and settled, your obligation will be to send the set amount to the debt management company on time each month. You will no longer need to worry about making numerous payments, the organization will take care of that for you.
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