How the cost is worked out
Insurers price payment protection per £100 of monthly benefit. The monthly premium is the repayment ÷ 100 × that price. Over the loan it's the monthly premium × the number of months. One claim pays the repayment for up to the benefit period.
Worked example
Protecting a £300 repayment at £5 per £100 costs £15.00 a month, or £900 over a 5-year loan. One claim would pay up to £3,600 over 12 months.
Before you buy
Payment protection insurance (PPI) was widely mis-sold. Since April 2012 it can't be sold for a single upfront premium, and a lender can't sell it to you at the same time as the loan. Cover is optional: check exclusions for existing conditions, self-employment and waiting periods, and compare with income protection and your sick pay.
What this calculator assumes
A fixed premium paid every month of the loan. A 24-month benefit usually costs more per £100 than 12 months, so use the price from your own quote.
Borrowing in the US?
The country choices above the inputs open separate local pages. In the US, credit insurance can be a single premium added to the loan, so you pay interest on it too. Choosing United States opens that page and resets the inputs; amounts are not converted.
For the US version, use the US credit insurance calculator in US dollars.
Inputs for the UK loan protection insurance calculator
Monthly repayment to protect
The repayment the policy would cover, in pounds.
Premium per 100 of cover
From your quote: the monthly cost per £100 of benefit.
Benefit period
The most months one claim pays.
Loan term
How long you'd pay the premium.
CALCULATOR QUESTIONS
UK loan protection insurance calculator questions
How much does loan protection insurance cost?
It depends on your age, job and cover. Multiply your repayment ÷ 100 by the quoted price per £100.
Is loan protection insurance worth it?
It can help if you have little sick pay or savings, but check the exclusions and compare it with income protection.
Do I have to buy insurance to get a loan?
Usually not. Most lenders offer it as an optional extra, and if a lender insisted on it, its cost would have to be in the APR.
Can I still claim PPI compensation?
The deadline for complaints about mis-sold PPI passed in August 2019.