Credit Disability Insurance Issues

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Credit Disability Insurance IssuesCredit disability insurance is not something that is commonly spoken of amongst people, but it is something that you will hear about as a pitch from finance managers. It will typically be pitched under a "fully protected" plan and just might possibly be beneficial to you after you have been approved for an auto loan. After you received the green light for an auto loan you may want to listen to the pitch for credit disability insurance because who knows it just might be something that could benefit you in the long run.

Basically what credit disability insurance will do is make sure that your car payments are made if you are unable to work due to serious illness or injury. Like any insurance you do not know if you are going to have to use it, but it is always a comfort to have. Know all of the facts though before you go ahead and sign up for it after receiving loans to buy a car because while it may be a necessary thing for you it just as well might not be for the others.

More Facts

If you do decide to take up credit disability insurance know that it will take 14-90 days for it to kick in from the onset of the disability. So make sure that you have an emergency fund that you can dip into just in case. It is also a good idea to have that ready anyway. Once that time has elapsed though they will start making the payments and you will not have to worry about it. In some situations payments will become retroactive though from the time you became disabled. This is something that you have to sign up for by request before signing the loan documents. It will typically be added to the finance amount and will then of course increase your monthly payments, but may be worth having it is up to you to weigh it out.

Pros and Cons

Here are some points to take into consideration when deciding if this is for you:


  1. Peace of mind in case of emergencies.
  2. Since it is rolled up into your monthly payment you do not have to worry about extra bills coming in the mail and paying separately.
  3. It will not be tied into your FICO scores which means your payments for it will not increase in case of bad credit


  1. As with most things cost and financial limitations can be a problem.
  2. It will increase the amount of interest that you are paying on the loan.

In the end of it all like most things there are good things and bad things that can come from it. You just have to figure out if it is cost efficient and if it would bring comfort to you in case of emergency. It is out there though if you are interested and if you need to get a loan to buy a car we can help you out in no time at all just with a simple application. Whatever you may need there is help here at

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada