Loans any advice welcome, please!

hammers1

Hi please can any1 help us get our heads round the way my dads bank HSBC work?

My dad applied for a loan of £10,000 a few years ago and was mis-sold ppi due to the fact he has been self employed for the last 30 years AND has personal insurance. He was told that the ppi repayments would be £47.44 a month totalling £2268.27 over the length of the loan.
What wasnt made totally clear was that the ppi would be given as a separate loan (with its own interest of 9.9%) on top of the initial £10,000 hed asked for and an extra £2260 was loaned to him for ppi. So in total my dad was loaned £12,260.
The total credit for the £10,000 including APR @ 9.9% was £2594.50.
The total credit for the ppi including APR @ 9.9% was £586.36.
The total amount of ppi cover was paid out to the insurers as soon as the loan registered in his account so was paid to in 1 go but the bank saw fit to charge him interest for 'loan' for 60 months. The length of the loan.

When i received a loan from Abbey ppi repayments were added to my monthly repayments at £15 pw, not given to me as a separate loan to pay insurers outright so my bank could charge me extra interest!!!

He made 21 payments totalling £5,404.21.
He then took out another loan and £8,879.03 was taken out to cover the 1st loan, therefore paying it all up. He was then refunded £871.36 from his ppi.
So he had paid in total £14,283.24 (in 21 months) on a loan that was supposed to be £15,440.86 (over 60 months). Anyone know why he had to pay so much back if he'd paid it off that early?

Also if APR is worked out at 9.9% how does that end up to be £2594.50 on a £10,000 loan?

The more i go into my dads bank details the more confused im getting regarding their charges and the way they work out their figures.

Sorry if i droned on a bit but i would really like to help my dad get back in order with his finances and hes no spring chicken anymore and needs every penny he can save or claw back from big fat greedy banks and their so called 'trained' staff. The only thing they're trained in is to how to make themselves a big fat wad of cash.

A big thanks to any1 who has had the patience to read all of this and get back to me.

Also Martin you are the Robin Hood of today. Thanks for your endless tips on saving and how to reclaim from banks. When i mentioned your name in a friendly 'chat' with my dads bank manager he seemed to go from a pink colour to a rather pale shade of grey, made his excuses and left us with another 'trained' member of staff!!! I know he was counting the pound signs as he left us, knowing we were going to reclaim charges and ppi. Oh well, Mr. Bank Manager, such is life.
:money: :mad:

CLAPTON

Borrowing 10,000 over 60 months at 9.9% does indeed mean you pay back 2,590 in interest.

Basically because 5 years is a long time.

In the early months you pay a lot in interest because you owe a lot ... so in the first month 10,000 loan will mean you pay about £80 in interest ... as the capital is paid off the amount of interest falls.

so after 21 payments you will have paid off about 1,433 in interest leaving only 1,700 to pay in the following 39 months but it also means you have only paid off about 2,800 in capital.

Clearly the refund of the PPI at 871 is obviously very low

You should make a claim for the full amount of PPI and interest as it was clearly missold

hammers1

Thanks for getting back to me. We have already made claims for the ppi, just waitng to hear back from the bank.
If i need any more advice after the bank has got in touch regarding their decision can i get back to you if i have any queries?
Thanks again.