HSBC Loan

ROBINSHIRLEY

Apologies if this has already been covered.
Is anyone able to explain how the redress is worked out.
I took out a loan in 2000 this was refinanced in 2004 and again in 2005. I had ppi on the 2000 and 2004 loan.
I am just wondering if the ppi cost and interest is incorporated in the new loan as the bank doesn't give you a refund of the payments when you take a new loan.
If that makes sense at all, is anyone able to explain, how that works.

-taff

The PPI is refunded when you refinance but it's not specifically mentioned on the paperpwork. The interest usually rolls over.

Insider101

When you refinance a loan with PPI, the policy is automatically cancelled because the loan no longer exists. There is a rebate of both PPI and interest, however, due to the "rule of 78" calculation method, it is less than proportionate. It does not go back to you directly but is taken off the settlement balance of your old loan. E.g if you paid £1,000 but refinanced halfway through, the rebate might be £300. The remaining £200 is rolled into the next loan, inflates the balance and continues to accrue interest. This therefore has to be allowed for in the redress calculation.

ROBINSHIRLEY

Thank you for your replies, thats really helpful.