Pleased But Confused

BOB_A_H

Hi there,

I have been re-claiming mis-sold PPI from a loan on behalf of my partner.

The loan was with A & L, and ran from 01 March 2003 to 01 Feb 2008.

The premiums on this amounted to £1624.20

Recieved a letter today offering to refund monthly premiums together with interest of 8% simple per annum.

They have calculated the inerest to be £622.61 up to 31 May 2010.

Although very happy to be getting a refund, I can not work out how the interest is calculated.

Any help on how this figure has be arrived at would be greatly appreciated.

Thanks in advance.

Bob.

Andrew_Thomas

it is a compound calculation of 8% since the monthly payment was made, each monthly payment is calculated at 8% from the day the payment was made. There is a calculator on the main website il have a look see if i can link it up for you

robbedofmymoney

a calculation needs to be applied to each payment to enable you to get this correct

the calculation is as follows

an example on a £10 monthly premium paid 60 months ago

£10 x 0.08 x 60 divided by 12 (to get it to per year) = £4

so for this premium it would be £4

if on the same loan the final payment was made last month the calculation would be

£10 x 0.08 x 1 divided by 12 = 7p

this is why you can't just apply a straight 8% to the total ppi figure,

i hope this helps explain how its calculated,

i have just run yours through my sheet and its spot on.

well done on getting your money back

BOB_A_H

robbedofmymoney wrote: »

a calculation needs to be applied to each payment to enable you to get this correct

the calculation is as follows

an example on a £10 monthly premium paid 60 months ago

£10 x 0.08 x 60 divided by 12 (to get it to per year) = £4

so for this premium it would be £4

if on the same loan the final payment was made last month the calculation would be

£10 x 0.08 x 1 divided by 12 = 7p

this is why you can't just apply a straight 8% to the total ppi figure,

i hope this helps explain how its calculated,

i have just run yours through my sheet and its spot on.

well done on getting your money back

Thanks very much for your explaination. I did suspect it would not be as simple as applying 8% to the total PPI amount, but had no idea the calculation was so complex. Can now send of the acceptance form.

Thanks once again,

Bob.