PPI Query

andys15

Hi

I am in the process of reclaiming PPI, and I have the original statement which confuses me somewhat.

It was a HSBC Loan. For 4000 pounds and it was over 5 years.

This is what the statement says:

17 Aug 04 loan drawndown #6278.18

I then make monthly payments of #104.64 for 26 months, and then I closed the loan by repaying #3557.76 on the 9 nov 06.

HSBC have wrote to me and say they did mis sell PPi on this loan, but I cannot work out how I repaid #6278, on a 5 year loan I only had for 26 months. I am sure the APR was roughly 14%. Could anyone please explain how the figures work out as I am really confused.

Many thanks in advance.

ps my pound sign doesn't work.

DarkConvict

Taking a complete guess.

You paid back £104.64 * 26 months = £2720.64
And a final settlement of £3557.76
Total paid back is = £6278.40

The loan was originally for £4000 @ 14%

Using http://www.makesenseofcards.com/snowcalc.html

This means paying back 104.64 over 26 months, with a final sum at the end to clear the debt would mean you had paid back interest of £904.83.

Total paid back for a £4000 loan over 26 months at 14% APR should be £4904.83

As you paid back £6278.40, that leaves a difference of £1373.57.

I assume the PPI is where the difference is going to come in as it would add to the balance/be included in monthly payments

GeorgeUK

Was the loan front loaded?

I'm having trouble with this - did it in excel.

You paid back £104.64 * 26 months = £2720.64
The balance outstanding would have been 2184.33

You made a final settlement of £3557.76
If you had continued to pay interest on the loan until the full 60 months was up,
£104.64 * 34 months = £3557.76
So you paid the full amount - no early settlement discount was given.

Total paid back is = £6278.40

The thing is though - if the loan was £4000 @ 14% APR, you would have paid this off after 50 months. This means there is another 10 months * £104.64 = £1046.40

This may be the additional PPI but why would they not have given you an early settlement amount instead of making you pay the full amount of the loan?

andys15

hi. just spoke to the bank. it was a loan for #4500, would that make it any clearer

andys15

The plot thickens. Ok it was a 4500 loan over 5 years. on my loan statement it says 3557.76 was paid in to close the bank, but I have just phoned the bank and only 3075.81 paid of the loan, so I dont know why my loan statemnet states the extra amount. so basically HSBC have stated they have mis sold ppi, I paid 26 payments of #104.64 and it look like i only paid of 3075.76 at the end. not sure this is looking good for a refund of ppi. really confused.

andys15

therefore i make it that I got 4500, and over the space of 26 months I repaid 5796, does that sound about right for a norm loan from the high street. An extra 1296 for having 26 month loan, equal 49 a month interest. sounds about right but what d I know.

di3004

Hi there Andy


Sorry I have not got round to reading all the posts yet, but I take it then you have already started the reclaiming side of things and the bank have accepted this was mis sold?

If your loan is still active, basically there are various ways this is resolved, some procedures are that you pay off this existing loan with a new loan without taking out PPI, where then refund you the PPI and possibly the interest, this way as read on here by Martin - if done this way then the new loan should be offered on approx the same rate or better, so do check with the bank on this.

There is a link here below as posted on the PPI reclaiming thread on how the FOS calculates PPI refunds, this will also give you some idea on how this works:
http://forums.moneysavingexpert.com/showthread.html?t=1596473

Of course you can still reclaim on the PPI.

Hope this link above helps you, good luck.;)

GeorgeUK

Okay, redone the sums and i get the following:

You paid back £104.64 * 26 months = £2720.64
The balance outstanding would have been 2848.48

You made a final settlement of £3557.76
If you had continued to pay interest on the loan until the full 60 months was up,
£104.64 * 34 months = £3557.76

They say your final payment was £3075.76
3557.76 - 3075.76 = 482
So you got a reduction of about 13.5% from the full amount that would have been payable if you had not paid the loan off early.

To work out the settlement amount
Amount owed in the following month + interest = 2879.76
Next 34 months - 1 extra = 3557.76 - 104.64 = 3453.12
3453.12 - 2879.76 = 573.36
This is approximately how much of an early settlement you should have got so i'm assuming the settlement you agreed was close to the date of the next payment.

None of this takes into account the PPI which if they say was missold, then you should be refunded. When PPI is added to a loan, they usually increase the interest rate so instead of the loan being 14% it may only have been 11% with 3% allocated to the PPI.

andys15

Many thanks for your replies.

The letter I recieved from HSBC after only writing to them last week was:

"On investigating your complaint I can confirm that the loan does not benefit from PPI, and a complaints officer will investigate the matters raised"

So I presume I am going to get some kind of refund.

di3004

GeorgeUK wrote: »

Okay, redone the sums and i get the following:

You paid back £104.64 * 26 months = £2720.64
The balance outstanding would have been 2848.48

You made a final settlement of £3557.76
If you had continued to pay interest on the loan until the full 60 months was up,
£104.64 * 34 months = £3557.76

They say your final payment was £3075.76
3557.76 - 3075.76 = 482
So you got a reduction of about 13.5% from the full amount that would have been payable if you had not paid the loan off early.

To work out the settlement amount
Amount owed in the following month + interest = 2879.76
Next 34 months - 1 extra = 3557.76 - 104.64 = 3453.12
3453.12 - 2879.76 = 573.36
This is approximately how much of an early settlement you should have got so i'm assuming the settlement you agreed was close to the date of the next payment.

None of this takes into account the PPI which if they say was missold, then you should be refunded. When PPI is added to a loan, they usually increase the interest rate so instead of the loan being 14% it may only have been 11% with 3% allocated to the PPI.

Hey we could do with more like you over at the PPI thread :T:T:D, pretty please......:D;).
I am hopeless with working these out........:o, please come along if you want to at the stated thread, cheers.:beer:

di3004

Also check this out here in how the FOS calculates refunds, this is useful as well.
http://forums.moneysavingexpert.com/showthread.html?t=1596473