The latest figures surrounding the payment protection insurance (PPI) scandal make for interesting reading; for example, did you know that the lenders have so far – collectively – repaid more than £10billion in mis-sold policy fees?
Or that the Financial Ombudsman Service (FOS) currently deals with 2000 new complaints about PPI every day?
These statistics serve to highlight just what a colossal scandal this is, and why more people than ever before are using an online PPI calculator to get an idea of the repayments they may be entitled to.
Should I Use a PPI Calculator?
If you believe you have been mis sold PPI then you can use an online PPI calculator to get an estimate of the amount you might be entitled to in repayment. Many thousands of people have successfully claimed so far, and with an average repayment of £2,750 it is well worth putting a claim into action.
Assessing the Value for a Single Premium Policy
It is still possible to work out the amount even you do not have the paperwork, but you will need to know the following:
- The total amount of the original loan
- The terms of the loan
- The APR value
Now, let us show you some simple calculations that you can use to work out your PPI compensation figures.
We are using an example that assumes a loan totalling £10,000 over five years (60 months) at 7.9%APR. Bear in mind that the standard rate of PPI on such a loan is 25%, although this can be considerably higher, so this means the total amount of your loan is now £12,500.
The following is a breakdown of the figures involved:
Loan Amount = £10,000
Term of Loan = 60 months
Interest Rate = 7.9%
Interest on Loan = £3,950
PPI Premium = £2,500
Interest on PPI Policy = £987.50
Total Repayable = £17,437.50
As the opening PPI cost is £2,500, we can work out that the interest charge over the five years comes to £987.50. This means that, before interest is added, your reclaim amount is £3,487.50.
A calculator for PPI claims also shows us that interest compensation is charged at 8% per year, so we need to add an extra £79 to the total, bringing it to £3,566.50.
However, there are some things that can change the result: you may have paid off your loan earlier than agreed and your PPI payment will be reduced, or your loan may still have a value outstanding.
In this case you could be refunded the amount paid so far and the remainder will be applied pro-rata across the remaining loan.
What are Valid PPI Claims?
Many people who have used a PPI calculator were sold policies that would never have been of use to them. For example, they many have been self employed, or retired.
Others were misled into believing that they were obliged to take a policy provided by the lender, rather than being informed that they had a right to shop around for their own better-priced deal.
Others were simply sold policies without anything being explained at all, so if any of the above applies to you, you can claim back mis sold PPI fees.
How to Make Successful PPI Claims
When it comes to reclaiming PPI you can either go it alone and take on your lender or use a PPI claims company such as ourselves, we provide a No Win No Fee* PPI claims service with no upfront fee and expert claim advisors.
You can also use an online PPI calculator for an estimate of your potential repayment.