Reclaiming PPI whilst in debt arrangement

mui7087

I took out a loan with Alliance and Leicester that included a PPI. Unfortunately, my circumstances changed and I had to make alternative arrangements to repay the debt. I had my payments reduced by half that technically extended my loan for a further 5 years. At the time I asked if I could cancel the PPI as it had added almost £7500 to my loan but was told unless I took out a new loan, which I would get because I had defaulted on the original agreement, the PPI had to continue.
Is this true, or can I know arrange to have the PPI cancelled and any refund due be taken from the outstanding debt?

Many thanks and keep up the sterling job :T

di3004

mui7087 wrote: »

I took out a loan with Alliance and Leicester that included a PPI. Unfortunately, my circumstances changed and I had to make alternative arrangements to repay the debt. I had my payments reduced by half that technically extended my loan for a further 5 years. At the time I asked if I could cancel the PPI as it had added almost £7500 to my loan but was told unless I took out a new loan, which I would get because I had defaulted on the original agreement, the PPI had to continue.
Is this true, or can I know arrange to have the PPI cancelled and any refund due be taken from the outstanding debt?

Many thanks and keep up the sterling job :T

Hi there

I didn't think they would be able to offer a new loan in these circumstances but I may be wrong here.

This is procedure with most banks to take out a new loan without PPI, then to pay off the existing loan, where yet you would still be paying for the PPI, as this would be included in with the settlement, maybe with a little rebate.

You can then still reclaim on the PPI you have paid, for more info check this link here as well:
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

Hopefully others who have had dealing with A&L will post up as well, with some advice for you, good luck and please keep us posted.;)