will my PPI claim be cancelled if I settle loan early?

GeorgeRob

My question is this: If i settle the loan early, will my PPI claim (that is already active) be cancelled?

Basically, I took out a £4000 loan with Lloyds in May 2007. I put in a PPI claim in Feb this year.. received 2 letters from Lloyds, both apologising for a lack of a proper and full reply so far. So I went to the ombudsmen in between the letters, and am still awaiting a reply along with everyone else in Britain it seems! I have £850 remaining to pay on this loan, and have just received about the same in inheritance money, so I was going to settle the loan early.

Any help duly appreciated!

George

DrSqueeze

Assuming you mean misselling complaint (as opposed to an actual claim) then the complaint will still be investigated, regardless of whether you repay the loan in full.

If upheld, you will be entitled to a refund of the PPI premium (plus interest).

amersall

You should not settle the loan until you find out if your claim for mis sell is upheld.
If you win,then the whole ppi is taken off the loan and the payments you made refunded to you,it would be better to wait and the loan will be repaid saving you the £850 and you will get a nice little cheque.

GeorgeRob

Thanks DrSqueeze, and Amersall. Slightly conflicting opinions there though!

DrSqueeze, you say I would get a full PPI refund as well as the interest.. would that be a higher figure if I continue to pay the loan in monthly chunks until its paid?

Amersall, won't I get the same amount back regardless of whether I settle it now or pay it off in instalments? The thing is I know if I keep this money in my bank account I'll fritter it away on nothing. I want to pay the loan off so I'll have an extra £70 a month, plus help my credit rating out.

amersall

Hi there, we are both correct really, i would wait for the mis sell to come back,and not settle early,as the refund could clear the loan as the ppi total amount is taken off the balance and i could keep the cash put by to repay the loan,plus have the ppi paid to date back to me with interest.
That is just my preference.

If you settle now you will get ppi back when you win mis sell, so you will have only given them money for them to give it back to you, hope you understand what i am saying....!!!.
This is what i would do anyway x.

DrSqueeze

GeorgeRob wrote: »

Thanks DrSqueeze, and Amersall. Slightly conflicting opinions there though!

Just a couple of different options really. As Amersall says, it's a personal choice.

I wasn't actually advocating settling the loan, simply confirming that the complaint would still be dealt with regardless.

You can repay the loan so it's finished, and one less thing to budget for each month. Then if the complaint is upheld you get a nice cash sum back, but this may take some time. The downside of course is that you've used up your spare cash in the meantime.

Or you can carry on with the loan and wait and see whether the PPI complaint is upheld. If it is, then hopefully the refund would be enough to repay the balance and give you a surplus. Depending on how long the complaint takes to resolve, you might have paid off a large chunk of the balance by that time anyway.

I suppose it comes down to how confident you feel about your misselling complaint and what else you want to do with your money. If you're not good at keeping money, perhaps have a look for somewhere to invest it where you don't have instant access or it's more difficult to withdraw.

DrSqueeze, you say I would get a full PPI refund as well as the interest.. would that be a higher figure if I continue to pay the loan in monthly chunks until its paid?

I don't really know enough about the figures to say, but I'm sure there are other people on this forum who could comment.

GeorgeRob

Thanks to both of you for being so helpful. I understand what both of you are saying. I think I will settle it early, just because with that and my credit card both gone, I'll have £90 a month more, and thats gonna really help me out as I'm struggling to meet all bills and still have a social life at the moment!

One more thing.. I thought most of the banks (including Lloyds) have basically said sorry for the PPI misselling and that they're paying it all back asap? My claim should be pretty strong I think. It was 4 years ago, and a guy in a branch said it was compulsory. Fingers crossed!

thanks

di3004

GeorgeRob wrote: »

Thanks to both of you for being so helpful. I understand what both of you are saying. I think I will settle it early, just because with that and my credit card both gone, I'll have £90 a month more, and thats gonna really help me out as I'm struggling to meet all bills and still have a social life at the moment!

One more thing.. I thought most of the banks (including Lloyds) have basically said sorry for the PPI misselling and that they're paying it all back asap? My claim should be pretty strong I think. It was 4 years ago, and a guy in a branch said it was compulsory. Fingers crossed!

thanks

Hi

Wishing you luck on your reclaiming and you should be ok.;)

That is correct in them saying sorry, they will still go through the normal procedures of investigating, all this was down to the Judicial Review which held things up, which have now caused a backlog, which is why the FSA have given the main of the banks extra time.

Fingers crossed for you.

amersall

GeorgeRob wrote: »

Thanks to both of you for being so helpful. I understand what both of you are saying. I think I will settle it early, just because with that and my credit card both gone, I'll have £90 a month more, and thats gonna really help me out as I'm struggling to meet all bills and still have a social life at the moment!

One more thing.. I thought most of the banks (including Lloyds) have basically said sorry for the PPI misselling and that they're paying it all back asap? My claim should be pretty strong I think. It was 4 years ago, and a guy in a branch said it was compulsory. Fingers crossed!

thanks

Hi there, this was Barclays,they are paying goodwill gestures for all claims put on hold by the JR.
Lloyds and others are going to the deadlines that the FSA have granted them,although you could hear sooner rather than later.

You may have your refund upheld by the time the first months saving of £90 kicks in...just my thought though
Fingers crossed x.