How to work out if I got a fair refund or not

[simonla]

Hi there, I am new to this site and I am looking for someone to help me or point me in the right direction.

 

I cancelled the PPI on a loan I took out in January 2006 and was told I had to start a new loan in order for the PPI to be removed.

 

The figures from the original loan agreement are as follows:

 

Principal Loan

 

Amount of loan - £20700

Period – 96 Months

Interest rate – 6.9%

Charge for credit - £6088.71

Amount payable - £26788.71

First payment - £278.96

95 further payments - £279.05

 

PPI Plan Loan (single premium repayment protection)

 

Amount of loan - £6230

Period – 96 Months

Interest rate – 6.9%

Charge for credit - £1832.51

Amount payable - £8062.51

First payment - £84.41

95 further payments - £83.98

 

Total Loan

 

Amount of loan - £26930

Period – 96 Months

Interest rate – 6.9%

Charge for credit - £7921.22

Amount payable - £34851.22

First payment - £363.37

95 further payments - £363.03

 

I cancelled the PPI in June 2008 after 29 payments had been made and the redemption breakdown, which at the time I didn’t even think to question, they gave me was as follows:

 

Redemption figure details

 

Balance- £24323.01 DR

Interest refund to close - £3815.38 CR

Amount to close loan today - £20507.63 DR

 

Loan protection details

 

Amount of premium refund - £2962.81 CR

Amount to close loan after premium refund - £17544.82 DR

 

New loan was taken out June 2008 at £17550.

 

I have been onto Guardian.co.uk’s website and checked out their Loan Payment Calculator so I think I know where the original redemption figure £20507.63 comes from, I don’t agree with it but I understand how they got to that figure. The thing that is troubling me is how they got to the figure of £2962.81 as a refund for PPI.

 

Any help that anybody can give me would me greatly appreciated.

 

Kind regards,

 

Simon

[dj1971]

Hi Simon,

 

Have you already signed the new loan agreement?

 

DJ

[dj1971]

Hi Simon,

 

Have you already signed the new loan agreement?

 

DJ

[dj1971]

Simon,

 

Sorry, just read the bottom part of your post.

 

Will do some calculations for you and come back with a figure

 

DJ

[dj1971]

Simon,

 

It looks like it would be difficult to challenge the amount of refund they have given you.

 

Reason being, they will claim to charge more interest at the start of the loan as the risks are higher. So although you are paying £83.93 per month against the PPI loan, in the early days perhaps only 33.93 of that repayment amount is coming off the outstanding balance and the remainder is interest.

 

Then further down the line with each monthly repayment, you are paying less and less interest and more of your repayment is being used to reduce the outstanding balance.

 

Do not think this is very fair, but apparently it is normal practice and widely accepted.

 

So I suspect there is little point in challanging the amount of rebate you have received.

 

DJ