Lloyds TSB loan advice

mercer_2

Hi,

In Dec 2007 I got a loan our for £2,500 @ 25% APR. I was also misold PPI (I was told it would help my loan application) which made the payments from £73.34 to £101 something including the PPI.

I soon cancelled the PPI as I didn't did it. My loan payment was restructed to £82 something a month and the initial loan amount changed to £2,855.45. The total to repay is £4770.58.

I've got two questions. When the loan was originally £73.34 why hasn't the amount change back to that from £101 when I dropped PPI? Why has a extra £355.45 been added to the amount which I have never received?

Also the loan amount never seems to go down. It appears I pay of the monthly amount and Lloyds adds roughly £40 on each month. I thought it would just be loan amount + interest then minus payments not loan amount minus payments add interest.

Aslo there's a shortfall of £162.30 does anyone know what this is?

I'm going to ring them soon as this has been a concern for the last month and we don't understand what is going on. Any help would be great.

Thanks

amersall

Hi there, when you cancel the ppi, they will give you a rebate for the ppi that is taken off your loan.
The remaining ppi is still there (unless you cancelled the ppi within the 30 days you have to cancel).
If i am wrong here someone will put me right, but that is how i think it works.

So that is why your monthly payment has not reduced by the ppi monthly amount, your payment only reduces by this if you win mis sell.

You will need to ring them and ask why there is a shortfall .

Some banks work the payments out as you have said, it will still work out the same way as you will make a payment, interest goes on so to me that works out the same.( i think!)

The £355.45 i think would be what is left after the rebate they gave you.
Hopefully Marshalka (our resident whizz with workings out) will , i hope! help you out more with this.

Hope i am correct with what i believe happens with this cancelled ppi !!!.

mercer_2

Well the PPI on the loan was £3,487.41 what is this remaining PPI? I have recently sent them a letter requested PPI refund. Also, why would there is a extra £355 on top of the loan I originally took out, I've never received that extra £355.

I think you're right it will work out the same way for interest it's just confusing that's all.

What is a shortfall though in general?

amersall

When you cancelled the ppi you will have recieved a rebate of the ppi.

when did you take the ppi out and when did you cancel it?, as this will have a bearing on what amount of rebate you had for this, and how many ppi payments did you make (if any) before you cancelled it?.

A shortfall is an amount outstanding, dont know if this was what was left after the cancellation and the rebate, without knowing what you got as a rebate.

You need to ring the bank and ask them for a breakdown of your account when you cancelled the ppi,then you will have a better idea of what they have done.

mercer_2

I took the PPI out when I took the loan out. I made two payments with PPI and then cancelled it.

mercer_2

Right I've just spoke to Lloyds and they have told me what has gone on. Basically I canceled the PPI in Jun 2009 after taking the loan out in Dec 2008 I also had 3 months pay later, I did actually pay 3 months of PPI though. When the PPI was canceled they for some reason refinanced the loan and put on the interest for those 3 free months which took the loan amount to £2,855.45.

I asked them why about £800 back from PPI when total PPI was £1,600 and said need to speak to their insurance dept which I cannot get through to.

I asked them what the shortfall was and they said there's no shortfall on the documents they have and they have got the originals, which is a bit false as they have scans which is a copy. I'll have to see what page number the short fall is on as they haven't a clue.

Moral of the story don't take PPI as it !!!!s everything up. If I wouldn't have taken it the loan would be costing me £10 cheaper per month. It has cost me £580 more over time. I've applied for PPI refund so hopefully this will cover it, if I get it.