PPI refunded

[allen_r]

I complained to lloyds tsb about mis sold PPI.They sold me a loan in 2004 along with a PPI policy.I waqs 66yrs.old at the time.Then recentley all the media coverage about misselling set me to thinking and looking into it.I realised,because I am turned 65 I am inellegeble for most of the cover,in fact the only claim I could make was if I died to pay off the loan,for the bank.
I wrote a letter complaining and the bank said they would investigate.It took a little while but without any argument Lloyds have offered to cancel the insurance and refund my premiums in full.
I was a little taken aback until I read on.The refund will be credited to the loan account but the loan repayments will stay the same and the term of the loan shortened.Originally they added the PPI premium,£3000+,to the cash loan,they are refunding the full amount and cancelling the PPI but meantime,in the 3yrs.Iv'e had the loan I have paid almost £2000 in premiums.Can they do this

[MelanieGiles]

Hi allen

I don't know whether the bank are actually allowed to do this, but isn't it better to get the loan paid off sooner rather than later?

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk

[allen_r]

Good morning Mel.
Its late and I can't quite get my head round the arithmatic on this one.
The cash loan was £15,319.and the repayments £257.78 over 84 months.The PPI loan was £3.282.at £55.23pcm.
Total loan £18.602.Repayments £313pcm.the PPI is cancelled,wiping £3.282 off the total.My £18.600 loan is now £15.319 but I am still paying premiums for £18.602,which should reduce the term of the loan.
But what about the £2000 I have already paid.

[Storm]

Has the current outstanding loan not reduced in line with the payments having been made ??

Have you made 36 payments ? (£2000/£55.23)

You could ask for a revised illustration of the loan so that you can see how capital and interest is being allocated.

It is probably worth reviewing the amount of interest being charged - if this is a Fixed Sum Loan Agreement the interest is calculated at the outset based on the amount borrowed x interest x term.

[allen_r]

Hi Storm.
Sorry Iv'e only just seen your post.As I said in my previous post 28/05/07 in my loan agreement the cash loan and the PPI are listed as two separate loans each with its own premium which have then been added together to make up a monthly premium of £313.01.
following my complaint over mis-selling they have offered tocancel the loan protection policy and refund the premium in full.
If I am reading this right,in effect in 2004 they lent me £3282 to pay the insurance up front they are noe cancelling that policy and refunding the loan plus interest,but what about the 3yrs premiums I have paid on that policy.Over £2000 with interest.
RAY