First Plus advice needed

highflyer79

I need some advice regarding a First Plus Loan me and my husband took out at the beginning of this year to consolidate debt and reduce our monthly payments. (Wish I knew about this site at the time!)

The loan was for £32k and was convinced to take out PPI of another £7836.80 on top of this. APR is 10.4% variable and monthly payments are £343.32 for the loan and £84.90 for the insurance. We really only took the PPI because we were told the premium would be refunded to us in the event that we had not made a claim after 60 months.

After reading some of the posts on here I have had a look into cancelling the PPI, however the policy says that because the risk is apportioned to the early part of the loan, after 12 months we would only get 25% back. The small print also says that we would be paid an amount equivalent to your insurance premium back if we haven't made a successful claim, been in arrears, settled or changed your loan after five years (less interest charges, subject to terms and conditions). Would changing the loan include moving to another property because we definitely intend doing this within the five year period?

Questions – I really don’t think we need the PPI as both our jobs are relatively secure, should I cancel and get the 25% (meaning I guess that 75% would still be on the loan?) back or carry on paying so as to get the full amount in 4 and a bit years time?

Also should I consider refinancing with another company (if possible) at a lower APR. I know First Plus have considerable early resettlement clauses, so would this be worth it?

Thanks in advance,

HF

mrcow

So will you get the total £7k premium back after 5 years? I've never heard of that before, but I've not had any real dealings with First Plus. My concern is that they may try and shimmy out of the refund?

If it is totally refundable I think I'd be inclined to keep it as it is until then as otherwise you're just adding almost £6k to your debt for no reason. On the other hand, you'll also be paying about £500 interest (over those 5 years) on the extra £2k that you would have been refunded.

So by cancelling, you'll get about £2500 back (if you include the interest that you would have paid on the £2k over the initial five years, some of which you've already paid btw so it's not quite as much as that), but will be adding £6000 to your loan needlessly (which over the 15 years will cost you over £11000), or you can wait 5 years, pay interest on the £8k premium for five years of about £2000 and then get your £8k back. I think you're better off keeping it, but someone else here should really go through the figures

I wish you'd found this site before you signed up too. From your figures, you are paying the equivalent of 15% apr (including the PPI) on a loan of £32k for 15 years which has now been secured on your home (?) and you will be paying First Plus a total of £77k over that period!

That's why they can afford so many crappy television adverts.

If you're thinking of moving, you need to call First Plus and clarify the situation with regards to the PPI premium refund (get them to confirm it in writing in a separate letter!).

Also with regards to the cancelling etc, then the only way that you can decide whether it's worthwhile at this stage is to start by getting a settlement figure from them and then see where you stand.

Another thing to look at which could save thousnads if allowed is to ask them about the possibility of overpaying the loan to try and reduce the amount of interest paid over the period. It depends on whether you can afford this, and you need to check whether this wil affect the refund of the PPI.

dfarry

Sorry I can't add any advice to this.... but I do feel for you. The only thing I know about FirstPlus is the disgusting TV advertisements and the even more irritating Carol Vorderman.

The rates have quoted are so high and with all tha clauses it is clear that First Plus are happy to fleece people to pay Carol Vorderman's no doubt extortianate fees.....these consolication companies are all wrong and it sickens me everytime I see a media advertisement for them...... you just know that someone is going to get caught out by them.

highflyer79

Thanks for your advice, will phone them this week in an attempt to get some clarity on the situation. They did say that the whole premium would be paid so I'm guessing that if it isn't then I have been misold the PPI?

savvykaz

Hi highflyer - we took out a loan for £41k with them 2and a half years ago and were also told we could claim back about £6,000 if we didn't claim against it. When we asked for a settlement figure some time last year they wanted over £48k even though we had paid £580 a month for about 15 months! Obviously we didn't bother and we too wish we had known about this site beforehand. I dread to think how much we will repay over the 10 year period!!!!!!!

tetley

dont forget that if you move house,first plus will want either a full settlement out of the proceeds of your sale,or a new charge on your new property.
the problem with this is that you will need a very large deposit to get another mortage because first plus will require enough equity in your new home to satisfy them,or they could stop the sale,frankly, because they now "own" a % of your house.