Lloyds PPI - loan protection insurance loan

batesy2000

Hi,
I have been looking to claim PPI from Lloyds as it's never felt right that in 2004 I was asked to make an appointment about my finances then basically coerced into consolidating my debts. This included PPI that I 'had to have' because the loan was for £25000.

I have found a statement from the loan that was fully paid in 2012 with no arrears despite a major job change in 2011 but my savings and company redundancy policy meant I was always going to meet payments.

The statement is broken down at the start into a loan of £21000 and then a Loan Protection Loan of £4386.01.

The wording of this 'loan protection loan' confuses me? Is this one of those single premium policies? Was the PPI calculated in full then added to my loan repayments as a regular monthly repayment? Is this a good enough reason to claim? I don't know how PPI is normally calculated or added to repayments but is it wrong the way the PPI was done? It's all very confusing, I was coerced into it, I had savings and a very good sickness and redundancy package and I think the PPI itself is dodgy.

Can anyone confirm or deny my PPI concerns?

Thanks

amersall

If you paid the loan in one monthly payment and not a separate monthly payment for the PPI, this is Single Premium PPI and a reason you can also use for mis sell, this is in effect, a loan on the loan to term end with interest, if the loan was settled early you would have received a rebate of the PPI but would have repaid the remaining PPI back in the settlement figure.

batesy2000

So, this is me being dumb. The fact the PPI wasn't a separate payment makes it missold. That's good to know but I'm curious as to why that's considered a mis-selling? Why was it wrong for lloyds to do that?

Oh is it still a reason even with the loan now repaid?

Nasqueron

I think the layman's view (I include myself in that) is basically because the PPI is added to the loan you end up paying interest on that as well as the loan, meaning it costs you much more in the long run (and quite possible the cover will end before your loan does)

[Deleted User]

Nasqueron wrote: »

the PPI is added to the loan you end up paying interest on that as well as the loan, meaning it costs you much more in the long run (and quite possible the cover will end before your loan does)

Lloyds PPI does payout until the conclusion of the loan and it's actually very rare for the policies to end before the finance.

However, as you say, PPI "front loaded" onto a loan will involve an additional loan of the total amount of PPI being added to the overall loan total and extra interest being added as a result. So the monthly payments the consumer makes towards the costs of the insurance aren’t actually insurance premiums – they’re additional loan repayments (and interest).

Most complaints about single premium PPI are still upheld by FOS.

Nasqueron

Ah OK thanks, I thought I had read somewhere these policies often ended after 5 years regardless of how long the loan was, maybe I misread

[Deleted User]

Nasqueron wrote: »

I thought I had read somewhere these policies often ended after 5 years regardless of how long the loan was

Some did, like policies from First Plus, but the vast majority covered the entire loan period (unless there was a default).