Could someone help me with a Lloyds Tsb loan PPI please

marshy27

Hi everyone, i did post this in another section but thought it might get more answers in here.

I took out a loan in June 2007 for £7500 for 60 months and on my agreement the amounts are as follows.

CASH LOAN LOAN PROTECTION INSURANCE TOTAL LOAN

Loan amount £7500.00 £1954.76 £9454.76
Monthly Repayment £161.64 £42.13 £203.77
Number of payments 60 60 60
Total Amount Payable £9698.40 £2527.80 £12226.20
APR 11.10% 11.10%

This is exactly how it is on the loan agreement i have. The reason im writing this is that i wanted to cancel the loan protection but continue paying the loan. So i was expecting to pay about £42.13 (less the interest) less a month but if i do cancel it only £15 comes off. So i'll still be paying £188.77 a month.

I asked why the full amount wont be taken off and they said its because the PPI is 'front loaded' and because im half way through the loan term (30 payments of 60) i've actually paid more off the loan insurance than what i have off the loan.

Now im not the brightest bulb but i was assuming that with each payment i make of £203.77, £161.64 will come off the loan and interest which as you can see is £9698.40. And then the remaining £42.13 will come off the PPI and interest which is £2527.80.

They say the reason why they cant take the full amount of PPI off is because to cancel the PPi they will have to restructure the loan therefore basically taking out another one to pay this one off (or something along those lines). Therefore leaving me with £188.77 a month rather than i origion loan amount which is £161.64.

Now this front loaded insurance wasnt explained out to me when i took out the loan. I took it out online through the Lloyds personal banking site and im positive it said nothing like that.

To settle my loan i owe £5441.99 including the interest with a settlement fee of £91.64 and a PPI rebate of £335.93 so it'll cost me £5177.70 to close it.

Is there any way i could get them to reduce the PPI by the full amount that they're charging me? So for instance if they're charging me £40 a month for PPi can i get them to take the £40 off the £203.77?

Ideally i'd like it written off but thats not going to happen is it lol.

Any help would be great, thanks

robbedofmymoney

it sounds as though you have a case for mis-selling on the loan protection insurance based on what you have mentioned,

this insurance is particularly unfair because Lloyds always say you cannot just cancel the LPI, you have to restructure the loan agreement, this is never explained when the policy is taken out and as a result, this is one of the reason why this type of upfront selling has stopped.

if you write to Lloyds claiming against a mis-sold LPI policy, stating the reason why, you can get all of you premiums back if you win, and have your loan re-structured as if the ppi was not there in the first place. (that sounds easy)

Lloyds are particularly slow and will drag out any LPI miss-selling claim so don't expect any quick fixes.

there are a number of template letters on this site and details of the reasons policies are miss-sold, some of these reasons may apply to you.

so go for a miss-sold LPI claim if you feel you have not been advised properly and any other reasons you fell relevant.

good luck with your claim. go for it, its the only way you will get anything out of Lloyds,

I am currently at loggerheads with Lloyds at the moment, as when i tried to cancel my LPI, my monthly loan repayments would have gone up!!!!

go for it, i'm sure others will be along shortly to point you in the right direction for the template letters and reasons for miss-selling.

di3004

marshy27 wrote: »

Hi everyone, i did post this in another section but thought it might get more answers in here.

I took out a loan in June 2007 for £7500 for 60 months and on my agreement the amounts are as follows.

CASH LOAN LOAN PROTECTION INSURANCE TOTAL LOAN

Loan amount £7500.00 £1954.76 £9454.76
Monthly Repayment £161.64 £42.13 £203.77
Number of payments 60 60 60
Total Amount Payable £9698.40 £2527.80 £12226.20
APR 11.10% 11.10%

This is exactly how it is on the loan agreement i have. The reason im writing this is that i wanted to cancel the loan protection but continue paying the loan. So i was expecting to pay about £42.13 (less the interest) less a month but if i do cancel it only £15 comes off. So i'll still be paying £188.77 a month.

I asked why the full amount wont be taken off and they said its because the PPI is 'front loaded' and because im half way through the loan term (30 payments of 60) i've actually paid more off the loan insurance than what i have off the loan.

Now im not the brightest bulb but i was assuming that with each payment i make of £203.77, £161.64 will come off the loan and interest which as you can see is £9698.40. And then the remaining £42.13 will come off the PPI and interest which is £2527.80.

They say the reason why they cant take the full amount of PPI off is because to cancel the PPi they will have to restructure the loan therefore basically taking out another one to pay this one off (or something along those lines). Therefore leaving me with £188.77 a month rather than i origion loan amount which is £161.64.

Now this front loaded insurance wasnt explained out to me when i took out the loan. I took it out online through the Lloyds personal banking site and im positive it said nothing like that.

To settle my loan i owe £5441.99 including the interest with a settlement fee of £91.64 and a PPI rebate of £335.93 so it'll cost me £5177.70 to close it.

Is there any way i could get them to reduce the PPI by the full amount that they're charging me? So for instance if they're charging me £40 a month for PPi can i get them to take the £40 off the £203.77?

Ideally i'd like it written off but thats not going to happen is it lol.

Any help would be great, thanks

Hi and welcome

I agree with robbedofmymoney, looks like you have a good case here, give it a go, and also with my experience of Lloyds they do not rush, hopefully you will be one of the lucky ones.

They have 8 weeks in full to respond, keep at them, and below is the link to useful guidelines of reclaiming:
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance
If you post by recorded post, you can keep a track on your letter and the timescales of 8 weeks.

You do not have to write any figures on the letter, but it successful they should send you a full detailed written breakdown.

Good luck, please keep us posted and yell for help anytime.

Di

marshy27

Based on my origional post, what do you think i could use as a reason for the PPi being miss sold?

I cant find any reasons in that link to use

di3004

marshy27 wrote: »

Based on my origional post, what do you think i could use as a reason for the PPi being miss sold?

I cant find any reasons in that link to use

Cheers for your PM, hope mine helps.;)

marshy27

Just a bit of an update incase anyone else who is in a simular situation reads this.

I've not yet wrote off to Lloyds claiming as the PPI being mis-sold as i wanted to make sure it was worth the hassle.

I just phoned the Financial Ombudsman Service to see if i could claim for it being mis-sold but they said no. They said the reason why is because lloyds have no other way but to cancel the loan and take out another one to remove the PPI as its combined in the actual loan.

As it stands im currently paying £203 a month for the loan and PPI but if i want it removed i will have to cancel the loan, take out another one for the remaining balance, sign the new documents and then pay the new amount of £192.00.

If i decide to go ahead and cancel the PPI i will only actually save £9 a month although at the moment the amount im paying for PPI is £42.

So at the end of the day i might aswell continue paying the extra £9 a month for peace of mind.

darrenk_3

hi marshy im in a similar boat mate barclays have told me to take out a £5,000 loan to cover the amount i owe which is £4,900!so i will be paying back £6,000 back over four years!apparantly thats the only way they can restructure my loan repayments!

marshallka

marshy27 wrote: »

Just a bit of an update incase anyone else who is in a simular situation reads this.

I've not yet wrote off to Lloyds claiming as the PPI being mis-sold as i wanted to make sure it was worth the hassle.

I just phoned the Financial Ombudsman Service to see if i could claim for it being mis-sold but they said no. They said the reason why is because lloyds have no other way but to cancel the loan and take out another one to remove the PPI as its combined in the actual loan.

As it stands im currently paying £203 a month for the loan and PPI but if i want it removed i will have to cancel the loan, take out another one for the remaining balance, sign the new documents and then pay the new amount of £192.00.

If i decide to go ahead and cancel the PPI i will only actually save £9 a month although at the moment the amount im paying for PPI is £42.

So at the end of the day i might aswell continue paying the extra £9 a month for peace of mind.

Hi marshy27, did you actually understand that his PPI was a premium that was paid for upfront by way of another loan on top of the loan you wanted? You seem to not understand and if this was not explained to you at the time of taking it then it could still be missold.

It works like this, you have a loan and they also loan you the money for a premium of PPI. They pay it over to insurer so you now have two loans, one being your original loan and one to pay for an upfront PPI. BOTH of these loans incur interest so your PPI loan is then spread over the term of your loan and when you want to cancel it, they only actually rebate a bit of the PPI premium BUT not the interest that was added to it cause it was a loan.

I would still go ahead with the misselling complaint if you did not understand this as going by what you have said above you thought it was like a stand alone policy whereby if you did cancel it whatever you were paying for it would be reduced in the repayments.

marshy27

marshallka wrote: »

Hi marshy27, did you actually understand that his PPI was a premium that was paid for upfront by way of another loan on top of the loan you wanted? You seem to not understand and if this was not explained to you at the time of taking it then it could still be missold.

It works like this, you have a loan and they also loan you the money for a premium of PPI. They pay it over to insurer so you now have two loans, one being your original loan and one to pay for an upfront PPI. BOTH of these loans incur interest so your PPI loan is then spread over the term of your loan and when you want to cancel it, they only actually rebate a bit of the PPI premium BUT not the interest that was added to it cause it was a loan.

I would still go ahead with the misselling complaint if you did not understand this as going by what you have said above you thought it was like a stand alone policy whereby if you did cancel it whatever you were paying for it would be reduced in the repayments.

To be honest in my agreement is states all the figures i posted in my first post but i didnt take a detailed look into them. I just seen by the way it was set out that the full amount including interest for my loan repayment was £161.64 and the full amount including interest for the PPI was £42.13.

So i assumed that if i cancelled the PPI that £42.13 would be taken off the loan and i would just have to continue to pay the £161.64. I did not understand that i would have to retake out another loan if i wanted to cancel the PPI as it didnt state that in the terms and conditions on my agreement. The reason for me thinking it works like that is because I read my terms and conditions and it says this under 'OTHER TERMS' I've written it out exactly how it is in there.

"If you choose to purchase the LPI, we will pay any LPI loan directly to the insurer to cover the price of the premium. If you decide to cancel the LPI policy the LPI loan will also be cancelled. The cash loan will continue and we will collect only the monthly repayment of the cash loan"

So you see, by reading that i actually thought they'd just cancel the PPI loan and i'd continue paying the monthly repayment for the cash loan. I did not understand fully that where is says "If you decide to cancel the LPI policy the LPI loan will also be cancelled", that BOTH the LPI loan and cash loan would be cancelled and that i'd end up paying more than the monthly repayment for the cash loan than what im paying now as it says LPI Policy and LPI Loan and not cash loan.

Also as you can see, it also says "The cash loan will continue and we will collect only the monthly repayment of the cash loan", it doesnt say that to remove the PPI the cash loan will be cancelled and restructured without PPI.

I was not told they would have to redo the loan to cancel the PPI, also if i knew that i would be able to take out a 3rd party PPI elsewhere then i would of done so after taking out the loan.

So i believe that after reading that statement above wrong and by not fully understanding the way its done i've actually put myself in this position by being thick

Ah well i know i certanly wont make the same mistake again.

darrenk_3

yeah marshy they actually say its probs better to take ppi out elsewhere instead of the ones that gave the loan cos you can get the ppi for so much cheaper,thats if you needed it in the first place.no dont be silly mate not thick.

marshy27

darrenk wrote: »

yeah marshy they actually say its probs better to take ppi out elsewhere instead of the ones that gave the loan cos you can get the ppi for so much cheaper,thats if you needed it in the first place.no dont be silly mate not thick.

Yea if i knew that at the lime of taking out the loan i would of done so :mad:

Ah well i've learnt my lesson lol.