PPI calculation

billypre

How do you calculate how much should be awarded ? I have a claim in at the moment with FSCS against Compass Finance and the sum was for a single premium PPI added to the loan which was taken out in 03/03 and the loan was paid in full on 12/05.

The loan was for 7000 over 7 yrs but as i say it got paid in full early. i am told that the ppi added to the loan at the start was £934.

Anyone give me any guidance of what a reasonable offer would be ?

Consumerist

If you are handy with a calculator, you could look at this MSE thread.

Did you get a partial PPI rebate when you repaid early ?

Was the £934 the PPI charge before interest or including 7 years of interest ?

What was the loan interest rate ?

You really need a full break-down of the loan and PPI before any reasonable estimate can be made.

billypre

Thanks. I'll give what info i have.

2003 - Loan for £7000 over 7 years. Monthly Loan repaymenst £119.50

Securde loan, and defaulted in Dec 2005 and full amount was paid back which they said was £10,768

The PPI was paid in full, no rebate. The £934 was added onto the loan at the start.

Consumerist

Sorry, there's not really enough to go on at the moment.

It's still not clear whether the £934 was the up-front PPI charge alone or the PPI charge + 7 years' interest.

You need to know how much of your monthly loan repayments were for the PPI and how many of them you paid. Multiplying the two together will give you the amount you should be refunded (without interest).

The compensation for lost interest will depend on how long ago the payments were made.

Sorry I can't be of more help yet. Most of the information needed will be in the loan agreement, if you can find it. Otherwise, you may need to wait until you get the break-down from the bank.

billypre

I dont have the loan agreement, and the company are now bust FSCS are dealing with it so hopefully they can sort it all out !!

Consumerist

Assuming the total loan amount was £7,934 (including PPI of £934), your monthly payments of £119.50 suggests an interest rate of about 6.8% APR on the loan.

After 32 payments, your £7,000 loan (without PPI) should have had around £4,720 outstanding at the time of settlement. Accordingly, your loan's settlelment amount should have been £4,720 and not the £10,768 you were charged. This means you overpaid at settlement by £6,048 in Dec2005 and that amount should be refunded with £2,419 interest at 8% pa simple since then.

If the up-front PPI charge was £934 (before 6.8% pa interest) over 84 months then you paid around £14.04 (including 6.8% pa interest) per month for PPI and you made about 32 payments 04/2003 - 11/2005 inclusive.

So you paid 32 x £14.04 = £449 in PPI premiums which should be refunded in full plus interest of around £69 at 8% pa simple.

So, in total, your compensation should be around: £449 + £69 int + £6,048 + £2,419 int = £8,985 altogether.

Don't forget that this estimate is based on a lot of guesswork in the absence of a full breakdown of your loan so the actual compensation could be significantly different.

di3004

Hiya

Even though the broker have gone bust, and they are responsible for the mis selling, your lender can still provide you with the copy of the agreement.;)

billypre

Thanks guys.

TheRealDeal_2

I'm unsure as well when it comes to calculations. Do I do 12 x £11.50 x 5 years then add 8% ? do you only add just 8% or do you also add the the APR of the card ?

di3004

Hi there

check this out here, posted by Consumerist.;)

http://forums.moneysavingexpert.com/showthread.php?t=2697331

TheRealDeal_2

di3004 wrote: »

Hi there

check this out here, posted by Consumerist.;)

http://forums.moneysavingexpert.com/showthread.php?t=2697331

Sorry but that just confused me even further.

''The 8% per annum simple interest is equivalent to 2/3 of 1% per month.''

What does that mean !?

Sorry but I am embarrassed to say that I am not good with mathematics.