Save money on online personal loans

People taking out personal loans online are set to save large amounts of cash because payment protection insurance will no longer be sold to them automatically.

That is according to independent payment protection insurance provider Paymentcare.co.uk.

The comment comes after the Financial Services Authority (FSA) revealed major finance firms have agreed to change how they sell payment protection insurance over the internet.

Previously personal loans providers offered deals online where payment protection insurance was automatically included, using techniques such as a 'pre-ticked' box.

Personal loans providers have now agreed to change their systems so customers have to actively choose to buy insurance.

"This is excellent news for consumers and yet another step in the right direction towards ensuring they receive the fair treatment they expect and deserve," said Shane Craig, managing director of Paymentcare.

"It’s also a very positive move for the image and reputation of the industry and will help to ensure that the people who really want protection will no longer be scared off."

Vernon Everitt, FSA director of retail themes, added: "We have made payment protection insurance a top priority and are pleased that firms have agreed to change the way they sell payment protection insurance over the internet.

"Naturally, many customers are focussed on getting the loan itself, but it is just as important that they also think about whether or not they want to protect their loan repayments by taking out payment protection insurance cover.

"This change means that it will be up to the customer to actively choose to buy payment protection insurance rather than it being sold automatically."