Interest Changed on Payment Protection for a loan

Payment Protection for a Loan

My wife and I took out a sizeble loan on a short term basis in order to fulfill the balance of 10% for the signing of contracts for a new house. (We had not closed on our original house)
The BOI mortgage adviser insisted that we had to sign up for the payment protection on this.
We have now paid back the loan 10 weeks after taking it out. We had always intended to do this when all deals were closed.
However I think we have been overcharged on two points

Full facts and figures:

Loan of 54,826k on APR of 7.9%
(50k lodged to our account. 4,826 was PP . 60 months agreement in 57 instalements - We never paid any instalements as we were going to clear loan before this was due.)
Payment protection fee of 4,826

Interest charged on loan = €802. PP included in this.
PP fee paid = €466.
However I think we have been overcharged on two points

1. The total interest charged on the loan has the payment protection sum included even though we never received this money. PP is a fee over the term of the loan (60 months). The interest on this in the region of €75.
2. Assuming that the PP protection sum is paid equally over the term of the loan we appear to have paid off 4 months extra (or €190) over what we should have paid.

Is this above practise correct? Any advice is welcome

First of all, it was wrong of the guy to insist you take this out - as far as I'm aware you cannot be forced to avail of this.

There are several threads on this issue (sorry, don't have the few minutes at the moment to link to them) in here. Basically no, you should have received a refund for part of the payment protection. Bank of Ireland have a helpline set up to deal with customers who had this problem and didn't realise and are due refunds.

The bank are within their rights to make the loan offer conditional on taking out PP, so no comebacks there I think (i.e. if you don't like the conditions, don't take the loan-nobody is forcing you to do anything). However, they cannot insist that you take out their PP product.

On the overcharging issue-I would contact the bank and ask them to explain in more detail how they calculated the fees and charges.

Note-you don't actually receive the €4,826-this would have been transferred directly to the PP underwriter, but you are still liable for interest on it-so I think you may have misunderstood this part of the issue.

Hope this helps.

Thank you folks.

You also appear to have been charged an Indemnity type fee for what was a personal loan not a Bridging loan...or was ita bridging loan ?

If the Birdging loan T&Cs did not clearly explain that and indemnity was required in addition to the Bridging finance you have a case.

This is a bit complex payment protection on personal loans in normally paid monthly , say €10 a month, and not €500 up front which is normal(ish) on a mortgage of about 100k over 75% LTV and is usually added back to the principle and reverse amortised onto it.

HTH

Tonka

Firstly is was a personnel taken out for 60 months but we had advised BOI that it would be paid back as soon as the sales were closed which actually happened.

I have been emailing the BOI contact. See my response and partial BOI reply below

"Thanks xxxxxx for your response.
However

1. " payment protection on a loan is weighted heavier at the beginning of the loan" - I don't see information anywhere informing me of this practise. I would have thought we should have been made aware of this.

2. Been charged for interest on the payment protection I believe is incorrect also. For example point 10 of the application number xxxxxx states "any charges not included on APR calculation for the loan = 2413.69".
However we have been charged for this."

I went on further to explain that

Tonka

Firstly is was a personnel taken out for 60 months but we had advised BOI that it would be paid back as soon as the sales were closed which actually happened.

I have been emailing the BOI contact. See my response and partial BOI reply below

"Thanks xxxxxx for your response.
However

1. " payment protection on a loan is weighted heavier at the beginning of the loan" - I don't see information anywhere informing me of this practise. I would have thought we should have been made aware of this.

2. Been charged for interest on the payment protection I believe is incorrect also. For example point 10 of the application number xxxxxx states "any charges not included on APR calculation for the loan = 2413.69".
However we have been charged for this."


I went on further to explain that I wanted to bring this up within the appropiate dept in BOI.
Can anyone recommend where I can re direct my issue?

Contact BoI Customer Services and tell them you wish to make a complaint. It will then have to be investigated. They turned around a complaint I made about my cc in aorund 10 working days.