You don’t have to take a course in business and banking to be able to know what PPI is.
The acronym PPI stands for payment protection insurance. It is an insurance scheme that protects the lender from loss and helps clients be consistent in keeping with their payment schedule in order for the debt to be cleared in the aforementioned end of the payment period.
For most parts, in small loans, PPI isn’t offered. It is in significantly large loans like for houses and cars that PPI is offered as a bundled package along with the loan. Every month, for a fee, the bank takes money from you plus the fee for the continuity of the PPI policy.
In cases where you fall ill, or is unable to continue paying for the debt for a period of time, PPI can help you maintain your paying schedule by shouldering a large percentage of the payment.
But the reason why a lot of customers refuse PPI, and why a lot of lenders insist on them is because the PPI policy is a legal minefield. At least one out of two PPI claims are rejected because they do not “qualify” or because they cannot sway the investigators that your PPI claim is genuine.
Always consider before accepting PPI policies. It might turn out useless in the end.