According to moneysupermarket.com, the PPI over five years with a personal loan at 6.7 per cent APR from Cahoot amounts to just £862 – compared with another lender offering a lower APR of 5.7 per cent but PPI of £2,083 over the same period.

The revelation comes as moneysupermarket.com urges borrowers to shop around for the best deal on their loan insurance as the PPI sold alongside their personal loan can be more expensive than they realise.

Moneysupermarket.com points out that the low personal loan rates offered by some lenders can encourage them to increase their PPI – often without publicising the increase.

“Despite claims from the industry that this insurance is over-priced, over-valued and often mis-sold, providers still continue to push their products at extortionately high prices,” Richard Mason, director of personal loans at the website, comments.

The website states that it is still cheaper to purchase standalone cover rather than go with the lenders’ offer, however.

Click here to find the best deal on loan insurance.

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