Interest on loan to pay off PPI loan

jolester

Hi,

we took a loan out for 25000 which we were informed we HAD to have PPI on to be eligible for it, approx 12 months down the line we were struggling with the repayments so went back to the lender (Lloyds TSB) to ask for help reducing payments, they offered us another loan for 36000 which was to cover loan one plus PPI, which was taken out over a longer period, but with the interest we ended up paying 51000 back (we did not have to have PPI on the second loan)

My question is, as we only had to go for the second loan to pay off loan one with PPI, as we could have afforded loan one if we didn't have the PPI element which we were told we HAD to have is there any case for us claiming the additional interest back from loan two?

I hope this makes sense

dunstonh

My question is, as we only had to go for the second loan to pay off loan one with PPI, as we could have afforded loan one if we didn't have the PPI element which we were told we HAD to have is there any case for us claiming the additional interest back from loan two?

The monthly premium difference with and without PPI would almost certainly have made little difference to your financial affairs. So, the first part of your complaint is unlikely to succeed. However, the second part is much stronger as you now have a chain of loans (albeit just 2) and having PPI on both extended your borrowing and the FOS tend to not like that.

The final bit about being told you had to have it rarely succeeds. There will almost certainly be no evidence to back up that allegation from you or the lender. However, you dont need it. The chain of loans to refinance is a strong reason to complain.

jolester

Thanks Dunstonh,

The difference was negligible, approx £70 per month but this was enough "cash" to enable us to pay our mortgage, however of course we then put some day to day living on credit cards which are still being paid off years later.

There was no PPI on loan two

Thanks

[Deleted User]

jolester wrote: »

There was no PPI on loan two

Well, you can try and convince the Bank that the addition of PPI put you into financial hardship, but that won't make the PPI mis-sold I'm afraid. What evidence do you have that the Bank suggested you had to have the insurance in order to get the loan?

£70 a month is £17.50 a week...

jolester

No evidence, only our word against theirs and the fact that the conversation is recalled from our end. We wouldn't have chosen to have PPI, especially when the payments were so high (approx 670 per month)

I'm aware that £17.50 is small amount a week but the £70 per month allowed us to keep our head above water with the mortgage. The loan payment for £36000 was £597 and was paid off in 2012. Had we have just been able to have had the original loan of £25000 with no PPI we'd have not needed load two and all the interest that came with it.

[Deleted User]

jolester wrote: »

No evidence, only our word against theirs and the fact that the conversation is recalled from our end.

You have a very weak "hearsay" complaint, then.

jolester

Ok, I appreciate your honest response.

dunstonh

You have a good complaint reason in the chain of loans. So, don't worry about irrelevant points or unprovable points. By all means, add it into the complaint but they wont be the things that make the difference.

[Deleted User]

dunstonh wrote: »

You have a good complaint reason in the chain of loans.

Yes, although the PPI chain ended with the first loan, there would have been part of the original PPI still to pay for the second.

-taff

jolester wrote: »

My question is, as we only had to go for the second loan to pay off loan one with PPI, as we could have afforded loan one if we didn't have the PPI element which we were told we HAD to have is there any case for us claiming the additional interest back from loan two?

No. No-one forced you to have a loan, or to consolidate it.
You can do as above, and complain it was single premium on the first loan. An element of that would have rolled over onto the second loan, but they will refund that too if you are successful with your complaint.

jolester

Thanks Taff, for fear of sounding thick... what do you mean by "single premium on the first loan" ?