Help!! the PPI is gonna get me!!

Brujah1

Please help, I'm a bit new to all this, but I have been completely devoted to MSE for about 8 months now, and you all seem to know what your doing!!
About 18 months ago I took out a top up loan... I already had a 10k loan but I needed to move from the exceedingly cheap huge flat i was living in, to the normal priced box that in which i now reside , due to the flat being sold. I was also changing jobs at the time in an effort to improve my circumstances and pay for the afore mentioned box. It seemed quite natural that, although I'd never bothered with PPI before, due to the risk of possibly being no good at said new job, and possibly being fired, PPI would be a good thing... Therefore i agreed, not worrying my not so pretty little head too much about it...DOH!
Turns out that the job demoralizing (Boss from hell) and the pay was not what i was told it would be, (13 pay days a year sounds good in principle but leaves a big short fall in the cash area)( If you've ever worked in a supermarket, you'll know exactly what i mean)
I have now got a job i love, with a decent pay packet for a decent days work, and I've been religiously been following all the tips on MSE, I've saved on insurance, Utilities, Credit cards, and I'm in the process of claiming back the bank charges that kept me in debt for many years.
As i said though, i took out this £12000 top up loan with PPI in a moment of stupidity, last 3week i decided to correct that mistake, I spoke to the lender who assured me that they would rebate the £5000 PPI (inc interest) and i could continue where i left off (£11087 with another 78 payments to go)but they would have to send me new paperwork to do so. This sounded reasonable, until i recieved it.
It appears to do this they in effect want me to start a whole new loan £11087 at another 7.9% basically paying interest on the original loan twice!!(in effect £3000 extra interest)
I'm completely stumped....I just don't know what to do! Should i sign the paperwork and except the fact that I'll only be saving £2000 instead of £5000, something is better than nothing??? Or is there another way to deal with this that I've missed???
Please, Please, please help!! I'm sooo confused, very frustrated, and more than a tad annoyed with myself for being that stupid in the first place!!
All suggestions/comments welcome....
Thank you in advance....
Brujah1
(ps the bank/lender is Abbey)

jonesMUFCforever

I'm pretty sure that most lenders have daily interest charged on loans these days - I don't think they are charging you interest twice.

Brujah1

Sorry, I'm not absolutely sure what you mean? they said to settle the loan it would cost £11087, i mean to pay it off in full excluding the PPI, the letter they sent says they want me to take out in effect another loan for £14097, including the new interest? Is this right then and I've just misunderstood?

jonesMUFCforever

The £11087 is the capital sum outstanding - you will pay interest on this come what may.

If you took out the original loan for £12000 + £5000 PPI then your original amount o/s would have been £17000.( On top of this there would be interest)
They are giving you back £5000 so you now owe £11k approx assuming some repayments have been made.

Brujah1

AHHH, the light has dawned, many apologies for being so dumb.... :wall: think it was the way they've worded it... the explanation you give is much more understandable... re-looked at the figures and although according to what i can see from the 18 payments I've made only £98 a month has gone towards the loan, and £114 has gone to the PPI, I do see your point, will sign on the dotted line tommorrow.... Thank you again, just wish I'd known about this website when I took out the original loan... (or had a bit more common sense..);)