As a borrower, PPI (Payment Protection Insurance) is designed specifically to protect your payments. If you fall ill, lose your job or suffer a severe loss of income that makes it impossible for you to continue making your loan repayments, the insurance will cover those payments until you are back on your feet.
If sold to the right people and for the right reasons, PPI offers great protection for consumers. However, the fact is that the policy was mis-sold for years. Today, hundreds of thousands continue to file claims for mis-sold PPI.
How much PPI will I get back on a £2000 loan?
There are a few factors that will determine how much you will get back. They include the percentage that was charged on the loan as PPI, the loan repayment period, and the loan’s APR (annual percentage rate)
Let’s say it is a £2000 loan payable over 5 years at 7% APR.If the PPI is 20% of the £2000 loan, that amounts to £400.
The amount of PPI you will get back will include the £400 plus the interest paid over the 5-year period. The interest is: £400 x 7% x 5 years = £140 You are also entitled to statutory interest from the lender at 8% of the interest paid:
Statutory interest compensation will be: £140 x 8% = £11.20
Therefore the total PPI you will get back is: £400 + £140 + £11.20 = £551.20
Please note that the statutory interest per annum will apply for the year until you make a claim. That means that if you are making your PPI claim 10 years later, the interest will be calculated for those 10 years.
How do I know if I should make a PPI claim?
If you have ever had a loan that wasn’t from a reputable lender such as BadCreditsite.co.uk, credit card or mortgage, there is a good chance that you are entitled to PPI compensation. Initially, PPI was meant to cover monthly payments if you were unable to make them for one reason or another. However, in many cases, sales staff did not reveal crucial information about what the PPI was all about. Whether you remember being sold PPI or you don’t, it is worth making a claim.
How do I know I had PPI?
If PPI is being deducted every month, it will be clearly indicated in your bank statements. If it was made as a one-off payment at the start, it is important to check the policy date. If you can’t get this information from your bank statements, you can contact your lending institution directly to inquire on whether PPI was actually added. You can also ask to be shown the terms and conditions that were applicable at the time you took the loan.
Can I claim PPI if I’m still paying the loan?
You can still make a claim against your lender even if you are yet to clear the loan. The only difference is that any refund due is likely to be used to offset the amount you still owe the lender. There is also a possibility that the lender will refund you the PPI amount and allow you to continue paying the loan.