Lump-Sum PPI Refunds and Compound Interests

If you’re a payment protection insurance claimant intending to get all your refunds, you’ll need to be prepared. Banks and lenders will try anything to discourage you from making your claim and one of these is offering you a lump-sum repayment. By offering you a lump-sum, you get at least 60% of the actual compensation you should receive, or even less, but you avoid the hassle of making a PPI claim.

Most customers will not settle for this amount. However, it is very practical to consider weighing your options before you proceed to make your own PPI claim. A lump-sum offering from a bank may be because a situation is so complex that you’ll need legal and expert support to resolve the issue. Surely, you could get a higher refund, but claims experts usually charge you 25-30% of the amount you get from the refund, which might be the same amount as the lump-sum offering, maybe even more.

But you will want to avoid a lump-sum repayment if you know that the PPI caused your loan interests to increase. These compound interests may be complex and you might need expert help to calculate the total costs of your refunds. This is when it is advisable to call in legal help when needed and much better if you can do it on your own.

However, it is not always a bad deal when you get a lump-sum offering. If you really see that your repayment amounts should be higher, then calculate your actual refund before you ask for expert help.