PPI interest calculation

[dmb248]

Afternoon all,

 

I am putting together a PPI claim to Nationwide for a Loan taken out in 2001 and paid off in 2004. They have supplied me with a copy of the Agreement and T&Cs but are avoiding my request for a copy of the PPI T&Cs - I have always been self employed and the agreement states that I am covered for unemployment.

 

As they are avoiding letting me have a copy of the PPI T&Cs I figure that I will just make the claim and see what happens!

 

I Just have a question on the compound and 8% interest calculation.

 

Been reading the forums and have found the interest calculator, my question is which figure is the principle figure? Is it the PPI amount or the PPI amount plus the interest that was front loaded onto the loan?

 

Thanks

 

dmb

[dj1971]

DMB,

 

The compound and 8% interest are calculated on your monthly repayments, not on the total amount of money you borrowed.

 

So it goes a little something like this:

 

1) Multiply your monthly repayments, which already include the compound interest, by the number of repayments made. eg £34.50 per month x 36months.

 

2) Calculate 8 % simple interest on each monthly repayment from the date of each repayment until the date they refund your money. As there is no way of knowing if or when they will refund you, I always use the last day of the current month just for the purpose of this calculation.

 

So if you were paying £34.50 per month and your first repayment was 01/02/01 your principal would be £34.50 and you would calculate 8% on that from 01/02/01 - 28/02/11

Then the same with the next months repayment: £34.50 x 8% simple per annum from 01/03/01 - 28/02/11

 

Continue with this until you have covered all 36 repayments and add up your calculations for each one.

 

You are also entitled to claim a further 8% simple interest per annum for the length of time they kept this money from you.

 

So the calculation for this is: total of your monthly repayment x 8% simple interest per annum, from day after you made your final repayment - 28/02/11

 

Hope this has helped. If you get stuck just give us a shout.

 

Good luck

 

DJ

[dmb248]

Thanks dj

 

Am I right with these figures.

 

The agreement is showing me: Optional Credit Insurance

 

£2,712.97 (cash price) £998.15 (interest) TOTAL PAYABLE £3,711.12 @ £44.18 (monthly insurance payment)

 

The redemption statement from June 2004 is showing me

 

£1,485.67 (insurance rebate )

 

So do I claim: £3,711.12 - £1,485.67 = £2,25.45 plus 8% interest 178.03 = £2403.49

Edited February 18, 2011 by dmb248

[dj1971]

dmb,

 

Don't forget the 8% calculation on £2225.45 from the day after you paid off the loan until end of February. This would be compensation for they holding onto your money for so long and will be awarded by any court, should you end up using that route, so I would add that on now.

 

DJ

[dmb248]

Thanks for the help dj

[dmb248]

Hello again

 

I have made a claim to Nationwide and they have until 17th April to respond. However they have sent me an FOS questionnaire (claiming tyo be a Nationwide questionnaire) for me to fill out. Upon reading it it would seem that it is actually a complaint form.

 

They have a letter of complaint from me stating the reasons for the complaint. As I have never made a complaint before I just wondered why I had been sent this and wheather this was standard practice? - surely once they have the Loan Account number they have all of the information they require on file to deal with my 'complaint'?

 

thanks

 

dmb

[dj1971]

dmb,,

 

Absolutely bog standard procedure the questionaire they have sent you.

 

In order to prevent any delays, I suggest you complete it and return to them.

 

Good luck

 

DJ

[dmb248]

Thanks DJ

[dmb248]

Hi again

 

My claim was originally rejected by Nationwide, I refered it to the FOS but this morning I recieved a letter from them.

 

Nationwide have agreed to settle based on the ombudsmans general approach, using Simple Interest. However all of the calculators in this forum use Compound Interest. Can anyone enlighten me as to the difference between the two and what I am entitled to?

 

Thanks

 

dmb

[ims21]

Hi

 

You say this was a loan account so the standard approach on a loan is that you get the refund of the premiums paid + the banks interest on those premiums + a further 8% statutory interest on them running from the date of payment to the date of settlement.

 

If the loan is still live, the proportion of unpaid PPI premium (i.e. the amount which hasn't become due yet) is rebated against the balance of the loan.

 

Take a look at No1 in my signature.

 

Regards

 

ims

[dmb248]

Thanks IMS