Most people will tell you a loan should be taken only when needed and when there are no alternatives. Taking a loan means interest payments plus at some stage you will have to pay back the principal and in the end, you could end up the financial loser.
Now many people are avoiding loans like the plague and all due to mis-sold PPI on the part of banks working in cahoots with insurance firms. People had taken loans comfortable in the knowledge that PPI would cover them for a period of one year in case they missed a payment due to events like a serious illness or an accident. In fact, banks said in order to avail a loan PPI was mandatory and many quickly signed on the dotted line.
When someone actually became ill and missed a payment and it was time to make a PPI claim, they were shocked to find they were not eligible. This was most likely because they were either retired people, jobless or self-employed and were strictly ineligible for PPI as per its guidelines. Having been misguided by the bankers into thinking that without PPI they would never get the loan, they also found the loan installments they had been paying every month also included the PPI premiums for a policy they did not need.
Because many of them were not financially stable which is probably why they needed a loan in the first place, they found they were paying out more than they were supposed to and greedy banks and insurance firms were benefiting in the form of profits..
