Do you have to have insurance to get a loan?

The lender will likely ask you to show proof of insurance when you apply for a loan. If you cancel any of the required coverages before paying for it, the lender can purchase insurance on your behalf and add the cost of the policy to your monthly loan payments. No, you generally can't be required to take out credit insurance. Lenders can't deny you credit if you refuse to buy optional credit insurance.

If you feel pressured to buy credit insurance, walk away and consider finding another dealer or lender. Legally, you can own a home without homeowners insurance. However, in most cases, those who have a financial interest in their home, such as a mortgage or the holder of a home equity loan, will require that it be insured. In addition, for your own ongoing financial protection, you'll want your home to have adequate coverage for homeowners as well.

Credit insurance is almost always more expensive than other types of insurance, such as term life insurance. He found that alternative protections, such as term life insurance, have a lower premium than getting a credit insurance policy when signing a loan. If you think this type of insurance is something you need, consider looking for a group of discounted insurance that offers this service. Credit insurance is often expensive, and you may be able to achieve the same goal if you get other insurance coverage, such as life insurance.

Whether the need is due to disability or unemployment, this insurance can help cover monthly loan payments and protect the insured against default.