Help please, something doesnt seem right??

madmartha

Hi
help/advice on this would be much appreciated.
My husband took out a £10000 loan in 2008. It was for 50 months with APR of 9.44& (is APR the same as annual interest rate, annual interest rate is mentioned on his loan statement).

Anyway in 2010 I realised that he was paying PPI on this and I was shocked to discover how much! However I cant remember the exact details and never realised at the time that we could complain this was missold, but I know that the PPI was for a lot of money.

My husband cancelled the PPI payments in January 2010 and a new loan agreement was sent for the amount £9027.00. As the loan was originally for £10000 and he had made 23months payments on it should he not have cleared more of the balance at this point?

I have used a loan analysis calculator and worked out that the balance should have been somewhere around £5373 when he cancelled PPI. Does this mean that those 23months payments were just for PPI payments???

your help would be much appreciated.

thanks

amersall

Hi,when you cancel ppi on a loan part way through the term,they do another loan without ppi and this may have a longer term and higher APR that is why the balance was more,the ppi is not removed from the loan,maybe you would have had a small rebate of ppi at that point,and maybe you did not.
The balance would not have gone down much for 23 payments over a term of 50 months.

Have you put a complaint in for mis sell of this ppi?,if not then i suggest you do.

McKneff

Why do you think the PPI was missold, presumably he knew what he was sgining, protection against not being able to pay the loan, just because it was expensive, doesnt mean it was mis sold.

Cant help with your other query. sorry

marshallka

Hi, when you cancel the PPI you still have most of the interest to pay that was charged on the PPI. Your PPI is actually another loan added to your other loan and with the same APR and number of months. They would have rebated a small amount of your PPI when you cancelled it but that would only be the actual PPi and not PPI and interest charged. This is why your new loan would not have reduced by much even though you made a considerable number of payments.

All the above (about the PPI actually being another loan with interest) should have been explained to you when you took out the loan. Was it?

amersall

marshallka wrote: »

Hi, when you cancel the PPI you still have most of the interest to pay that was charged on the PPI. Your PPI is actually another loan added to your other loan and with the same APR and number of months. They would have rebated a small amount of your PPI when you cancelled it but that would only be the actual PPi and not PPI and interest charged. This is why your new loan would not have reduced by much even though you made a considerable number of payments.

All the above (about the PPI actually being another loan with interest) should have been explained to you when you took out the loan. Was it?

That is what i meant :Dyou explained it better x.

marshallka

amersall wrote: »

That is what i meant :Dyou explained it better x.

And I agree with you that the OP should get a complaint in. xx

madmartha

Yes we have, only recently put a claim in though.
We feel it was miss old as it was not explained that it was optional and also mentioned that it was needed for loan application to go through. It was only when I read up on PPI miss selling racket at the time in 2010, did I realise he didn’t actually need it.

I don’t think for one minute that I can claim misselling for it being too expensive, I probably didn’t explain myself well enough in last post. I was shocked at the time to find out how much PPI cost in total.

Yes I’m sure my husband was aware of what he was signing however when you want a loan and are advised at the bank in order to get this product you need PPI you probably tend to believe the bank staff.

I don’t think there was a rebate at the time however this is something that will need looking into.

Thanks for your help.

madmartha

thanks for your help. It was never explained it was a seperate loan. does that mean he is still paying interest on the ppi? Sorry for all the questions. I think I may have posted this reply twice so sorry of I have! Does my husband have a valid claim for mis selling?

marshallka

I would think that some of the PPI and interest was carried over into your new loan balance when you cancelled. If this was a single premium PPI it was a loan to pay the insurer in full (they got their money regardless) and you had to have another loan to do this. This should have been explained when you took this out and it would then be treated just like your other loan and incur interest just the same. When you cancel the PPI you usually get a small amount rebated against your balance that is then used to open your new loan account. It is only rebate of the PPI amount (not the interest charged on this).

If you go off your figures above then your repayments on the first original loan of £10000 without PPI would have been about £241 a month. Anything over this would have gone to PPI.

madmartha

Hi how do we know if it was a single premium, does that mean the payments were included in loan payment?