2007-10-16 14:44:28 · 5 answers · asked by Maya H 1 in Business & Finance ➔ Personal Finance
There is a big difference between wants and requires. Most loan companies will try and sell you all sorts of insurance products (unemployment insurance to retired people). Some insurance may be required by law such as property insurance on purchase money collateral. It really depends on the type of loan and the state you are in. Make sure to ask a lot of questions and if they are just trying to sell you and its not required get a refund.
2007-10-16 17:36:15 · answer #1 · answered by krazykarlsig 3 · 0⤊ 1⤋
It is not legal in Canada for a loan company to require you to pay in advance for an insurance policy they are selling you.
I am sure their are similar laws in the state you reside in. It is legal however to require the loan to be insured, either through the loan company or any other insurance company.
Often people have insurance that they can assign to the loan to meet the requirement.
Sounds like the loan company is looking for the commission on the insurance policy to me - also sounds like they are trying to sell you life insurance.
Check out your options, while you may be required to insure the loan, you don't have to buy the insurance from them. Other companies in the market may be able to offer you a better rate and only by a term life policy that matches your loan, ie 5yrs. This will be the least expensive way to handle this.
2007-10-24 03:27:08 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No, it's not. This is part of a scam. The "lender" gives you a song and dance about needing the insurance policy in case something should happen to you and after you make so many months' payments, it will be refunded. Don't believe it. They will take your money and you will never see a dime of the loan proceeds. With any legit lender, any insurance premiums are often added to your monthly bill or taken out of the loan proceeds. This needs to be disclosed to you before you sign on the dotted line. This sounds like a scam to be.
2007-10-24 04:52:06 · answer #3 · answered by JLB 2 · 0⤊ 0⤋
You may be falling for a SCAM.
Do not pay any fees when applying for a personal loan. If it were legit, the "insurance" would be taken out of the proceeds or added on to each payment.
If you are dealing with someone with a generic email address (Yahoo!, Gmail, Hotmail, etc.) you are definitely dealing with a scammer.
2007-10-17 02:14:30 · answer #4 · answered by Wayne Z 7 · 0⤊ 0⤋
It is not only legal, but very common practice.
2007-10-16 16:58:52 · answer #5 · answered by Keep On Trucking 4 · 0⤊ 1⤋