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juicy47

How is the 8% interest worked out???

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Hi all - just wondering if some-one can tell me how the 8% interest is worked out please?

 

I took a cash loan out for £13,000, with the interest charged totalling £3,884.72.

The PPI policy was included in the cost of the loan for £3,571.62, with the interest charged totalling £1,065.18.

The total amount payable for the loan was £21,521.52, repayable over a term of 72 months.

The monthly payment towards the loan was £234.51 for the capital element and £64.40 for the PPI element, with a total monthly payment of £298.91. The APR of the loan was 9.4%

 

I made my first payment on 26 Mar 01 and the last payment on 4 June 2003 respectively.

 

Upon settlement I was given a rebate of £1,864.68 and an insurance rebate of £1,345.47 which was applied to the account on 5 June 2003.

 

My claim has been successful and this is what they stated in my letter:-

 

As you have already received a rebate of the interst and insurance we will refund the outstanding premiums and interst charged on those premiums of £2,890.07. In addition we will pay 8% simple interest of £149.07.

 

We have received this money but have since had a call saying that the 8% interest has been mis calculated. They have sent a letter stating:-

 

I (The loan provider) have re-calcuted the 8% and it totals up to £2,311.81. I have advised you over the telephone that I will deduct the previous amount which is £149.07 that has been credited to you from the total that is £2,311.81 and this would leave a balance of £2,162.74 for the 8%.

 

Is this correct - don't know how the 8% is calculated - just seems a lot of money to be 8% of something, or does it depend how far back the loan was. Confused.com

 

Appreciate anybody comments

Thanks in advance

J

Edited by juicy47

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Hi

 

Have a read of No.1 in my signature....all you need to know is there.

 

You can use the spreadsheets at the end to work out what should be due to you


If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

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I've tried using the calculator on the forum but it comes nowhere near so not sure I'm doing it properly x

Thanks for your reply x

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OK I'll see what I come up with....bear with

 

Might have some more questions though :-)


If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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OK quick calculation and I get £2,844 premiums and associated interest.

 

I also get £2,310 for the 8%.

 

Total of £5,154.


If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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Ah that is about right - thank you so much, was worried about having money that was not mine x

So is the 8% calculated by how many years since you had it x

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The 8% is awarded on each payment towards the PPI part of the loan from the date it was paid right up to the date of settlement.

 

In addition there is a slightly more complex part which is this...

 

When you settle a loan early you are supposed to get a rebate on the unused part of the PPI. Very rarely is the done on a pro-rata basis. Consequently, when it comes to removing PPI from a loan altogether, there is generally an overpayment of PPI at the point of settlement of the loan.

 

In your case, the balance on the PPI part of the loan at the date of settlement was about £2,451 and you got a rebate of £1,345 which means there is an effective overpayment of £1,106.

 

So you get that £1,106 back and 8% on it running from the date you settled the loan up to the date of settlement of the PPI claim.


If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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Still a bit confused ... but you have put my mind to rest x

Just didn't want to take the money if it wasn't mine x

Thanks once again for your help x

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