Lloyds ppi - have they calculated wrong? Advice please!

emlet

Hey all

First time poster (long time lurker!) here.

I have just had my letter from lloyds detailing my refund (complaint upheld - apparently if you have income protection insurance they take any ppi off that amount - so you pay for the same thing twice!) ... but Im not sure the calculation is right. The details of my loan (which is still active - 24 months left) are:

loan 5000
ppi 1200.57
total amount loaned 6200.57

repayment term 5 years
interest 14% (ish)
monthly repayments 174

Offer from lloyds -

refund of premiums 1079.04
simple interest 127.77
total 1206.81


Now - that to me doesnt seem right - the premium alone was 1200, I have been paying interest on that at 14% (it was added into the overall loan) and although Im only 3 years in, i expected a refund of the interest extra that id paid (and then simple interest on top of that?)

Have I calculated wrong ? They have said they will cancel the ppi remaining on the loan - but surely that doesnt compensate the extra Ive paid?

Also, I had a loan with them prior to that (though I think I cancelled the ppi on that part way through to reduce the payments) and a credit card (same thing again I think). The only reason I didnt cancel it from the curent one is that I would have had to refinance the loan - because it was added in at the time= which would have affected my credit rating. The other policies were "add ons". Can I ask them to look into those as well (I dont know the details for those though?)

Any help gratefully appreciated before I call them tomorrow!

Many thanks

Emlet

p.s :beer: to all the successful people!

amersall

Hi there, well done on your win.

You only get ppi back that you have paid to date,in your case you paid 36 months of this,they give you the ppi you paid with interest and the 8%,the ppi monthly payment you made included the interest for the ppi.

The total ppi comes off the loan and the monthly payment goes down by the ppi amount.

Give them a ring and ask if they are looking into the other loan,as this was refinanced they should have the details of this.

Reference the credit card,you need to put a claim in for mis sell if you have valid reasons.

Annisele

I don't know whether Lloyds is right, but I'm afraid I think you're wrong.

You haven't actually paid them the £1200.57 yet, so you shouldn't get all of it back.

To see that, pretend that your complaint had been upheld one day after your loan had been taken out - that is, before you'd made any payments at all. Although you'd have been overcharged by £1200.57, you wouldn't have been entitled to a single penny back - as you wouldn't have yet paid anything.

Alternatively, you could say that, of your monthly £174 payment, £140.24 (80.6%) of it is repayment of the actual loan, and £33.76 (19.4%) is for the PPI. (I got those figures by saying that £5000/6200.57 = 80.6%). So, your actual overpayments have been £33.76 per month for three years, so you should get back £33.76 * 12 * 3 = £1215.36 plus interest.

My figures aren't the same as Lloyds, so one of us has made a mistake - but it might just be that I've assumed exactly three years and my timing is out.

You can certainly ask Lloyds to look at your other policies.

emlet

Thanks all! That makes much more sense now!:j

They will also cancel the ppi on my loan - will that be a significant amount do you think or not?

Emlets

Derwent

emlet wrote: »

Thanks all! That makes much more sense now!:j

They will also cancel the ppi on my loan - will that be a significant amount do you think or not?

Emlets

Your monthly loan repayments will reduce by the amount you had been paying each month for PPI (and interest), which according to the calcs above is £33.76 per month. So your monthly repayments should go down to around £140 per month from now on.

emlet

Many thanks! Oddly though when I tried to cancel the Insurance a couple of months ago (which is when they told me I would have to refinance the loan) they said the payments would only drop by £10 a month as the premium was "front loaded" ?

ANyone else had something similar - or where there ppi has been cancelled and their payments have dropped?

Thanks!

Emlet

amersall

Usually when you cancel the ppi the loan is a new loan without ppi,they give you a rebate from the ppi but the remaining ppi stays on the loan.
That is why the monthly payment differs,also,you will have the £1200.57 taken off the balance.