Another option is the Credit Union, I believe you can even buy insurance where if you lose your job the loan is forgiven but I do not know the details.
Bob, it's one thing to question AMR's finances, but you really should get your ducks in a row before you start suggesting that people play roulette with their finances credit rating....
Can you post a link to the job loss insurance if it exists?... I just spent a few minutes on the Credit Union's website, and the only loan insurance product remotely close to what you've described is for death/disability.
Assuming the coverage still exists, in the short term, you
might conserve a little cash, but it will cost you in the long run.
Here's a link to one credit union's job loss insurance on mortgages:
http://mortgageinsurance.genworth.com/pdfs/Marketing/JobLossBorrDisclosure-20110324.pdf
Maximum of three consecutive payments per occurrence, and lifetime maximum of six payments. Nowhere is the loan forgiven... They have a clause which denies claims due to "prior knowledge of any pending involuntary unemployment prior to the effective date of the benefit"... I'm not a lawyer, but if you are a union member and knew about the potential for a strike by your union, then coverage might be denied.
The house will always cover their costs first and foremost... so if they're the ones trying to sell you the coverage, beware.
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Think I'm just a corporate plant or a shill?.... You don't have to take my word for it.
If you've ever listened to Clark Howard on the radio or on CNN, this is the type of stuff he regularly debunks. He even wrote a piece about this on his blog last month:
http://www.clarkhoward.com/news/clark-howard/personal-finance-credit/credit-card-protection-policies-are-rip-/nCR3t/
Here's an excerpt from the Baltimore Sun article referenced from that link:
The Government Accountability Office reports that consumers shelled out about $2.4 billion in 2009 to the nine largest credit card issuers for debt protection products. For every $1 cardholders paid in fees, they received 21 cents of benefits. Meanwhile, the card issuers earned 55 cents, before taxes, on every dollar of fees.
If Clark says it's a rip-off, it probably is.
So does this Dave Ramsey reader...
http://www.daveramsey.com/articles/article-list/category/100423/ictid/stupidtaxf/storyID/39346/
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Sorry for making this a WT-length post.... but this goes beyond the normal definition of bad information, especially when it encourages people to screw around with their personal finances and credit ratings...
Saving money for a job interruption is sound advice. Stop eating out and going to the movies once a month... Give up cigarettes. Get rid of HBO and Skinimax, sell the jet-ski, bass boat, camper, park the extra car on blocks & discontinue the insurance... Go read DaveRamsey.com and figure out other ways on how to become debt free...
But borrowing?... You'll have better luck at the craps table.
