How Much Compensation Can I Expect to Receive for my PPI Claim?
PPI claims and PPI compensation is big news at the moment. We are getting a lot of calls from people who want to make a PPI claim but are unsure about how much compensation they might be entitled to.
PPI for the uninitiated stands for ‘Payment Protection Insurance’. Its an umbrella term for any kind of insurance that was taken out to protect loans and credit card debts. The idea behind the insurance is that the PPI policy would pay out if someone lost their job or fell ill and weren’t able to meet their repayments. However, these PPI policies were mis-sold. Banks, credit card companies and other institutions sold PPI to people who simply didn’t need it or who wouldn’t be covered anyway, such as the self employed. The courts have now ordered these institutions to repay the money and the bill for this is expected to run into billions of pound.
So, lets assume you have been mis-sold PPI (if your aren’t sure then we can soon tell you), how much compensation are you likely to be entitled to?
Calculating the precise amount of PPI compensation isn’t easy. Complex calculations have to be carried out which take into account a range of variable factors that are different in every case. Accordingly, we recommend you contact us for an individual assessment of your PPI claim. We would say that of course. We are lawyers and we have to be careful about the advice we give. However if you want a rough idea of what you can claim then read on.
One way of ‘guestimating’ what you might be entitled to is to calculate what your monthly loan payment should have been. Here are some examples – if you were paying more then chances are PPI was included in the package:
- A loan for £5,000 over 5 years at 5% should be £95 per month.
- A loan for £10,000 over 10 years at 10% should be £130 per month.
- A loan for £20,000 over 3 years at 20% should be £750 per month.
Once this figure has been determined you can add in the cost of interest (this would return you to the same position you would have been in if you hadn’t taken out the PPI insurance) plus the 8% interest which a court would award you as compensation for your losses.
The insurer should also consider correcting any additional losses you have incurred as a result, such as arrears or default interest.
If you happen to know what the PPI insurance costs per month, then all you need to do is multiply that figure by the term of the loan to work out what it has cost cost.
If you don’t have the necessary figures you can work out the total cost of your loan by multiplying the monthly payments by the loan length and then deducting 15% from the total.
Here is an example:
Repayment sum (pm) Length of Loan Cost (length x repayment) Likely Insurance cost at 15% of total
£ £ £
100 3 years 3,600 540
125 5 years 7,500 1,125
150 5 years 9,000 1,350
200 7 years 16,800 2,520
150 20 years 36,000 5,400
Hopefully this will at least give you an idea of the sort of level of PPI you might be eligible to receive. In practical terms its much easier to give us all the information and let us investigate and assess the actual compensation figure.
For more information about PPI claims and claiming PPI compensation contact specialist PPI solicitor Roger Cheves on 0808 155 6389 or email [email protected].
For more information you can also check out our dedicated PPI claims website www.theppisolicitors.co.uk