Accidental injury, serious illness, or losing a job are things that can turn your life upside down. Not least, the economy is affected. With the help of loan protection or a security insurance you can better manage the stress on your personal finances which means a temporarily reduced income.
What is loan protection?
A loan cover is a special insurance that is linked to a loan. If you suffer from illness or become unemployed, the insurance covers the payment of the loan. The protection is limited to a certain amount and for a certain period of time. Sometimes it also includes a life insurance that pays off all or part of the loan should you die. Loan protection as a product is usually relatively expensive, given the compensation you receive in the event of damage.
Why should you insure your loan?
Safer if the unexpected occurs
Just as an umbrella is good when it rains, insurance is important once the accident is over. Unexpected events such as serious illness or involuntary unemployment have a major impact on your finances as income decreases. It therefore feels safe to always carry with you the knowledge that you actually have protection if something boring happens.
Avoid payment remarks
If you are unable to pay off your loan, it may in the worst case mean that you will receive a payment note. Injury, illness and unemployment are today some of the more common reasons why debts go to the custodian.
A good alternative to a loan protection is something called collateral insurance. Such insurance is intended to reimburse you for fixed costs, such as for your loan, when you have reduced income due to illness, injury or unemployment. A social security insurance also covers the care of close relatives.
What is best? Loan protection or Social Security?
The big difference between a loan protection and a security insurance is that the loan protection is linked to the loan. The compensation is based on your monthly cost of the loan. If you need to utilize the loan protection, the compensation covers the cost of the loan. You do not get the money into your account, but the payment is handled directly from the insurance company to the bank.
On the other hand, the insurance is completely independent. You choose an amount yourself which will then be the monthly compensation you receive if you need to take out the insurance. For example, at Astro Finance you can choose a protection of up to $ 10,000 per month and the compensation is paid directly to your bank account. Therefore, you are not limited to using the money to pay your loan costs.
How does the price differ?
The price of loan protection varies between different banks. The usual thing is that the premium is a certain percentage of your monthly cost of the loan, usually around 9% of the monthly payment. For example, if you have a monthly cost of $ 4000 and the loan protection has a premium of 9%, then the price per month is $ 360.
For Social Security insurance, the cost is based instead on the amount of compensation you as a customer choose. Through Astro Finance, a Social Security insurance that pays $ 4000 monthly is $ 245. For more information and exact price information, you are always welcome to call us and we will tell you more.
How do I obtain loan protection or security insurance?
You take out loan protection directly from the bank you choose to borrow from. However, in cases where you choose to take out a member loan through the Union or similar, loan protection is included. Unfortunately, often at the expense of a high interest rate. There are also banks that offer member loans without the involvement of unions, such as Loans & Spar.
Astro Finance offers a favorable social security insurance that gives you compensation in the event of an accident, illness or care of a close relative, which results in you being unable to work. The insurance also applies if you become involuntarily unemployed.
Compare banks with Astro Finance
Astro Finance is basically a loan broker. As for private loans, all banks specialize in different types of customers. It is therefore not possible to say that one specific bank is better than another in advance. This is why it is important to compare different loan offers to find which bank suits you best!
If you as a private individual go to several different banks to compare the terms, they each take credit information on you. This affects your credit rating and can impair your ability to get a really low interest rate. If you choose to compare with Astro Finance, only one credit report is made. The service is completely free of charge and you do not commit to anything when you make a comparison. Instead, Astro Finance gets paid directly by the bank or lender when we can help them get a new satisfied customer.