What the.... Just received a cheque for £1582.82???

pnq06

Erm... I'm slightly stunned and confused so please bear with me while I explain this :rolleyes:

Right, I cancelled my PPI on my loan but was told at the time that I don't receive the money it just gets deducted from the payments each month... Fair enough I thought as it was saving £36 pm.

But I've just opened the post to find a cheque for £1582.82 :eek:

Why have they decided to do this- I thought people were taking loan companies to court for results like this?

And who does it benefit? Silly question but am I going to be worse off in the long run still paying the same money over the same years?

I just don't get it????

Rafter

Does seem a bit odd. What kind of loan is it? Did you mention something about being mis-sold when you cancelled the policy?

Usually, particularly if you are quite a way into your loan, the level of refund is small.

You may find that instead of reducing your payments, they have simply refunded the PPI still due instead and your payments will continue as before.

Only way to be sure would be to call them up - wouldn't want to alert them in case there has been a mistake though!

R.

jonesMUFCforever

Or pay it into your account - wait for it to clear and then overpay your loan.
Your monthly payments may stay the same but the term and interest charged will be much less.

pnq06

Tar for the replies- amongst all the excitement/confussion I almost missed my Dr's appointment!!!

The loan is just a bog standard unsecured loan and when I asked about canceling the PPI and if I get the money back or if it gets taken off etc. they got all defensive and said no money gets returned it gets taken off the loan instead When they asked why I was canceling the PPI I just said that I found better cover for a lot less each month- In fact I got off the phone kicking myself because I thought they'd refuse it!!! (I had to send my reason in a letter)

I don't understand what to do? Should I be grateful and take the money and run or are they doing it to benefit themselves with interest etc?

It says in the letter that my payments will remain the same each month but surely the term I'm paying for becomes reduced as I'll still be paying the interest on top but why doesn't it say it in the letter?

Oh please help as I can't see past the £1582.82 that I could really do with to clear bills etc.

Emmzi

I think you have in effect a loan for the PPI included in your loan.

So you have your insurance premium back, balanced against now not having cover.

BUT this money came out of your total loan amount originally. The loan amount hasn't changed. - so you are still repaying this £1582 as part of your loan, plus the interest. Same monthly payment, same term.

pnq06

I was afraid that would be the case!!!

(I'm still too scared to phone cos I can't make sense of it and can't stand the calls where they make you feel thick for not understanding!)

So how can they justify what they're doing? They're still making me pay it back in effect... Surely the term I'm paying would have to be reduced because I don't pay the PPI anymore?

However- I did apply for a top up on my loan the other day and got refused so should I just bank the money and count my blessings that I can a least pay off a few arrears?

Emmzi

re: arrears - possibly. your other option is to reschedule the loan for an amount reduced by £1500, but it's a lot of work for them, you may get charged another arrangement fee, early repayment charge etc... because they may argue they didn't *have* to refund the PPI, it was fine when it was set up, etc.

If the alternative was a 2nd loan.. I'd get some bills etc settled and save up hard to repay early.

they aren't making you repay it btw.. you have got the cash! They're making you pay interest for the cheque in your hand. It's a subtle diffrencve which costs you (of course) but probably costs you less than a top up loan.

pnq06

Blimey they can never make it easy can they!!!!

Thanks for the advice- I just didn't want to do anything stupid cos I'm not exactly in a right frame of mind to make decisions (preggers brain!)

jonesMUFCforever

pnq06 wrote: »

Blimey they can never make it easy can they!!!!

Thanks for the advice- I just didn't want to do anything stupid cos I'm not exactly in a right frame of mind to make decisions (preggers brain!)

You can't have it both ways!
Either you use the refund money to reduce your loan or you carry on paying for the duration of the loan without the cover.

pnq06

ejones999 wrote: »

You can't have it both ways!
Either you use the refund money to reduce your loan or you carry on paying for the duration of the loan without the cover.

It doesn't seem that simple. I phoned them this afternoon and basically they can't actually explain why they are paying me the money (that they didn't want to give nor did I demand) All I wanted them to tell me was why they're paying me the remainder insurance money but still keeping my monthly payments the same and not reducing the period or the interest as surely I'll be paying it back in the long run... They're getting someone from accounts to check it over then call me back tomorrow as the woman on the phone was just as confused as me and so was her supervisor :rolleyes:

Emmzi

Forget about interest for now.. is this any clearer?

I lend you a hundred pounds, and pay £30 to an insurance company in case you default. You owe me £130.

Partway through, you decide you don't want the insurance. You have paid me, say, £55. You still owe me £60 for the loan, and £15 for the insurance. So I am £75 out of pocket still.

The insurance company cancel your policy, and refund £15m, which I pass on to you.

Either you give me back that £15, and only owe me (75 - 15) = £60, or you keep that £15, but still have to pay me back £75.

You can't keep the £15 and then only pay me back the £60, because then I make a loss.

Any clearer?