MSE News: Got an HSBC personal loan? You could be due share of £218 million in refund

beeswax95

Just to add:
My Non Qualifying Loans (3): 2005-2006, 17 August 2006 - 19 January2010, 10 April 2010 - 11 July 2011
My Qualifying loan (1): 11 July 2011 - 01 August 2015

Tink2014

Eastcorkram - see all previous messages on the thread it gives a lot of info - customers receive a letter to say they are to be refunded X amount. It happened yesterday. HSBC are processing all closed loans within the next few weeks.

Loan Opened - November 2011 (5 year loan)
Settled early approx April 2013
Amount of Loan: 13k
Quite a high interest rate from memory.

I believe it is only loans opened after October 2011 that are eligible for interest refunds.

dktreesea

Macca80 wrote: »

For all those with small payments, it's due to the length of the loan taken. Regardless of the size of loan, no interest is due for the first year of repayments as no error had been made until this point. The error is that detail about loan re-payments was not included on the annual statement received at 12 months, so those with just 2 year loans will only receive interest on year 2. Hope that makes sense?

Are you sure? My loan was for £5k for 3 years, we only had it a year and a half before it got paid back (replaced with another loan) and the refund was £470. I had the same experience as another poster, weng. I rang them and asked what it was for and how it was calculated. All very vague at first but I persevered.


I had the impression it was because when we paid back the loan early, we paid back too much. So instead of calculating the loan each month as :


Month 1
£5k + interest - repayment = Bal end of month 1


Month 2
Bal end of month 1 + int - repayment = Bal end of month 2


they seem to have loaded all of the interest onto the front of the loan. I was really surprised to hear this - I thought that was illegal?


Of course, if the loan runs its full course, then this doesn't matter, as you have paid the correct interest. But if, say, the interest over the 3 years worked out at £1500, they load all this onto the front of the loan so, say, they account for the first 9 repayments all as interest, if you then pay off the loan at the end of month 18 instead of 36, and they don't recalculate the interest to reflect the shorter loan period, they've overcharged you.


I do remember asking about this at the time, i.e. I'm paying out the loan early, why is the payout figure practically what I would have paid over the next 18 months anyway? But they were vague.


I am now going to go through all the loans and see if they did the same trick for the early repayment ones. And also I want to try to work out their calculation of the rebate. So far I can't get any accounting to come out at the figure they have paid out.


Has anyone else successfully worked out exactly how much interest was rebated on their loan, i.e. over x amount of months and why?

dktreesea

Tink2014 wrote: »

Finally some good news for my husband and payment will go in on his birthday :-) we settled the loan early but I believe we have been paid back interest we would have paid in the settlement figure as the refund is a decent amount and more than we were expecting

Yes, that's what I think, it's the interest that was front loaded at the beginning of the loan, not adjusted to take into account the early repayment. But I can't get the figures to work out. Can you?


And if this is the case, why don't they have to make refunds for all early repaid loans where no interest rebate has been given even if they were taken out before 2011?

gordo43

Finally received a letter in relation to the refund, being paid back next week. Some figures that may help people plan what to expect:

Loan start date Jan 2011
£9000 over 36 months
Refund amount £440

(Although not stated in the letter, the total interest added on the loan at the start was approx £1000).

letThemPlay

I'm guessing my letter must have got lost in the post; I checked my bank account this morning and noticed the refund had finally been paid (dated yesterday). £462 for an £8000 over 3 years.:j:j:j

Really happy I can finally stop getting frustrated with the whole situation.

Fingers crossed everyone else gets the refund soon.

Minx1986

letThemPlay wrote: »

Really happy I can finally stop getting frustrated with the whole situation.

Fingers crossed everyone else gets the refund soon.

Really hope so!

JKSandy

Tink2014 wrote: »

Eastcorkram - see all previous messages on the thread it gives a lot of info - customers receive a letter to say they are to be refunded X amount. It happened yesterday. HSBC are processing all closed loans within the next few weeks.

Loan Opened - November 2011 (5 year loan)
Settled early approx April 2013
Amount of Loan: 13k
Quite a high interest rate from memory.

I believe it is only loans opened after October 2011 that are eligible for interest refunds.

Just to note, my loan was taken out on 7th March 2009 and I received a refund of interest.

weng

I finally read the letter from HSBC , just received it monday I first got the refund 3 weeks ago. But the letter was dated one week before the money was put in my account.

Slayerx

Letter dated the 26th received today loan 5k refund £637.18 think my loan was from Dec 2011 from memory.