How was PPI actually repaid? Can someone help?

GILL999

Hi there

I'm wondering if anyone can answer a question for me. I'm in the middle of a claims process with Intelligent Finance (Halifax) for PPI mis sold to me back in 2004. I have a copy of the credit agreement with them showing the cash borrowed of £8,400, then the PPI (called IF Creditcare) of £3,395.28, then the charge for credit of £5,066.88.

I know that I made repayments on this loan for at least 4 years, but I think (not sure as no longer have the paperwork) that I then settled early after this point and repaid the balance.

My question is, how was the PPI repaid? I've seen a lot of information saying that the repayments you made every month paid back the PPI first, and only did you start to pay off the cash borrowed. Is this true? The claims group I am using has indicated this was not the case, and that your monthly repayment would be split, but in all honesty they've been pretty rubbish so far and not entirely sure I believe them. Is there any way of knowing? (Halifax themselves won't tell me anything). Was there a standard procedure or did it vary from bank to bank? And whichever way it was, would this effect whether any interest was charged on the PPI?

Thanks very much in advance for any thoughts/advice/experience!

Gill

The_Marksman

I believe that, the ppi amount is added to the total cost of the loan (in your case £8,400+ £3,395.28) this plus the loan interest rate is then split over the term and paid each month by yourself.

ie. £8,400+£3,395.23+£5,066.88 total amount of loan over 60mths.

so you would have paid an equal amount off the ppi each month (this can change but is more the norm) due to this way of adding the interest from the loan to the ppi the banks got in trouble the ppi became front loaded.

so when you paid your loan up you would have had a part refund of the ppi, so that will come off any redress due. (return of ppi payed, plus interest charged to ppi, plus 8% simple interest). hope that makes sense.

GILL999

Thanks very much for your help! So if my monthly repayments were £200.74, how would I begin to work out how much of that figure each month was for PPI? And also how would I know what would the interest rate on the PPI be? The interest rate of the loan was 10.7% APR (total interest charge for the loan was £5066.88 as mentioned above).

The_Marksman

GILL999 wrote: »

Thanks very much for your help! So if my monthly repayments were £200.74, how would I begin to work out how much of that figure each month was for PPI? And also how would I know what would the interest rate on the PPI be? The interest rate of the loan was 10.7% APR (total interest charge for the loan was £5066.88 as mentioned above).

the loan interest rate would be the same as the interest on the ppi as the two figures are added together and then the interest applied.

what was the term of the loan?

GILL999

Ah I see! That makes sense. The term was 84 months, although I think I settled after about 42 months. Thanks very much for your help

The_Marksman

GILL999 wrote: »

Ah I see! That makes sense. The term was 84 months, although I think I settled after about 42 months. Thanks very much for your help

Im not one for figures but i think your monthly ppi payment would have been £60-£80 with the interest applied, £40 without. i always work it out without interest then you get a nice little extra!

so as a very raw guess at a refund it would be

£40 (ppi) x 42 mths paid
+ the interest paid on to the monthly ppi
+8% simple interest
-any refund already paid against the ppi

Hope that helps you a little more to understand the calculations, the real experts will be able to
work it out to the penny for you im sure