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PPI refund has been credited to my loan account-is this right?

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I've recieved a prompt reply from Welcome finance after reclaiming PPI payments.


The letter states that as a gesture of goodwill they are refunding the total ppi policy plus interest- a total of £2946!


They have however automatically credited this to my loan account without giving me any other payment option. Firstly I believe that the amount I still owe is much less than this, so surely this refund should leave my loan account in credit. Secondly, are they allowed to do this?


I realise that APR's and early settlement fees are complicated to work out. However, I believe that if my loan hasnt been cleared by this refund that its been somehow swallowed up by interest charges. I do believe that if I was to recieve a cheque for the refund I could settle my loan and still have some of the refund left.


Oh, I'm getting really confused! Can anyone help? Should I write back to them requesting a cheque?

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I think the key word here is "believe". Unless you know exactly how much remains on your loan, you can't really make an informed decision about what to do.


Secondly, if you have a high outstanding balance, then they are quite right to repay the PPI to the loan, as it isn't money you have actually paid out, if you are still owing it. If the loan was paid off altogether, it would be different.


However, this is all academic until you get a statement showing it all, then you can work out what's the best next step, so I would suggest you do that first and foremost. ;-)

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Thanks for your reply and in response to the above.


Last June I asked for a settlement figure and I paid a lump sum off the loan, which according to the settlement at that time left a balance of £1600. Since then I've paid at least £800 in monthly payments.


Without exact figures I agree its hard to say as interest is applied monthly. However, on the face of it I feel that this is an unfair outcome...

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