PPI on Loan

lou_martin

Hello

I took out a Northern Rock Loan a couple of years ago with PPI. Not knowing much about this sort of thing (much to my disgust now!) I assumed I could cancel my PPI with them as I had read so many articles (not from this site as i have only just discovered it) saying how it was a bad idea and to cancel it if i could. So after trawling through my papaerwork from NR and finding nothing saying i couldn't or would be charged for it i wrote them a letter in February stating that i would like to cancel the PPI and copied in the paperwork i had found which stated that i could cancel this at any time. I have heard nothing from them since and now having read some posts on here am worried i will get a hefty charge for requesting i do this now?? Also i have read about the PPI being'front-loaded' so perhaps i have already paid that off?

What should be my next step with regards to contacting NR? I still have 3 yrs or so left to pay.

jonesMUFCforever

Firstly what is your credit rating like now?
It looks like the PPI was loaded onto the loan and can not be undone now. You will have to repay loan and resubmit loan application for outstanding amount. Part of the PPI will be repaid to make o/s figure lower but refunds of PPI are not done pro rata.
Ask NR for a sttlement figure and take it from there.
Eric

Debt_Free_Chick

I agree with Eric.

When you took out the loan, you would have signed a credit agreement. You should have a copy of it. It will show that you borrowed a total of

The loan amount
Interest on the loan amount
An amount to cover the PPI premium
Interest on the PPI premium

When you signed the agreement, you were agreeing to the PPI and the interest on the PPI premium. In order to cancel the PPI, you'll need to cancel the whole loan, by paying the settlement figure and then taking out a new loan. In practice, you'll take out a new loan to cover the settlement figure that NR require.

HTH

lou_martin

My credit rating isn't too bad, i have recently been approved for new credit but in saying that i have also tried to take out a loan to pay off the existing before, again with NR, and been hounded into having PPI again or the interest rate shoots up. I have tried elsewhere and had exactly the same problem with PPI salesmen, even when i tell them i have existing cover!!

BountyHunter

Would they charge you a settlement fee if you paid the loan off outright? If the answer is no you may get a better deal elsewhere, or the settlement fee may not be that high & you may make savings with a cheaper APR elsewhere- worth a thought if you are not happy with the service.