Natwest Loans - Dirtbags.

zincoxide

I have a work colleague who took out a loan over 5yrs with Natwest for £5300. She also took Payment Protection Insurance (do'h) and has been paying this now for 2 years.

When we worked it out, she is paying back just over £10,500 over the 5yrs.

So today she called and asked to cancel the PPI which they told her she couldn't do, but she could cancel the loan, take out a new loan to cover the old one without PPI. When she asked for a final settlement of her original loan, they want over £8k! Saying quite firmly that they are within their rights to claim the interest for the entire loan period. :mad:

To me this sounds absolutely ridiculous - does anyone know how she can cancel the PPI? And/or get a reduced final settlement figure and onjly pay a coupld of months worth of interest?

zincoxide

Forgot to say, the PPI is an astounding £35 per month!! £2100 over the period of the loan.

jamesd

When did she take it out? 31 May 2005 or later?

If before 31 May 2005, ask NatWest for a "settlement quotation" for a settlement date of June 1, 2007 with the settlement covered by the "Consumer Credit (Early Settlement) Regulations 2004". Those rules will limit the penalty to two months interest maximum. Waiting 9 months may be worthwhile.

Astaroth

The problem is that some products have PPI built into them and others have PPI as an optional extra. If it is an optional extra then it can be cancelled and the loan continued (though with some form of cancellation fee of cause) but if it is an integral part of the loan then it cannot be cancelled but the whole loan must be stopped and, if necessary, a new one take out to cover the amount payable.

I do not know for natwest but for a large number of loans with integral PPI the PPI and its interest are all added to the loan from day 1 and this is what you start paying off first and bascically only once this is cleared do your payments actually go towards the loan and its interest.