Personal loans to undergo 'disentangling'

21 March 2006
Personal loans are set to undergo a "disentangling" process that should improve customer confidence.

The provision of payment protection insurance (PPI) alongside personal loans has become a controversial issue amid concerns that many policies are too complicated and include too many loopholes.

Chris Johnston of the financial services research firm Defaqto believes PPI will begin to be separated from the terms of a personal loan to improve transparency.

"I think what will happen is the disentangling of PPI from the loan itself," Mr Johnston said. "Specifically this will mean PPI will be de-coupled particularly from loans.

"That is where the big differences will occur," he added.

PPI can offer peace of mind for borrowers but certain policies make it very difficult to make a claim.

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