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Loan Reclaim

It is odd how seemingly innocuous words can have different connotations for different people based on their experiences in life. The term "loan insurance" usually invokes thoughts of security and confidence in the minds of borrowers, especially when lenders mislead them into believing that the policy will cover their repayments if they become unemployed, ill or injured. However, the majority of PPI policyholders are denied benefits when filing a claim against their policy, after being deemed ineligible for repayment assistance by the insurance company. Although lenders are obligated to inform borrowers of coverage eligibility requirements, many simply ignore them in order to sell a policy and increase profits. If you believe your lender ignore eligibility requirements, you may want to file a payment protection claim against them for unfair practices.

How Much Can You Gain from a Loan Reclaim?

The cost of a PPI policy can be as much as 13 to 56% of the total loan amount but the claims ratio for PPI policies is only at about 20%. This is entirely unacceptable as it means that for every pound spent on a PPI premium, payment protection insurance companies pay out only £0.20! When the claims ratio of PPI policies is compared to that of other types of insurance (household insurance has a claim ratio of 55%) it is not surprising that the FSA has been investigating this type of cover for the past six years. As an example of the excessive cost of a payment protection insurance policy - a £10,000 personal loan can carry a PPI policy that costs as much as £5,600, of which a refund would provide substantial repayment assistance for borrowers that are successful in claiming PPI insurance back.

Reasons to File a Loan Reclaim

A payment protection insurance policy is regarded as being mis sold if the financial institution doesn't inform the individual of the policy's terms, conditions, fees, and insurance protection conditions. If you are under the impression that you were not sufficiently warned about the policy's coverage/eligibility requirements and cost or were indeed ineligible for the PPI policy when you signed for the loan, you might want to think about claiming back PPI. While the eligibility guidelines will vary in accordance with the policy fine print, nine out of ten policyholders applicants will have their claims turned down because of coverage ineligibility. You could be allowed to reclaim personal loan protection payments if the broker neglected to completely describe the policy eligibility stipulations and exclusions for the PPI policy, or decided not to adequately alert you of the policy premium. Provided it's proven beyond doubt that the PPI policy was mis sold, either by means of deceit or persuasion, you should be successful in claiming back PPI.

PPI and Loan Reclaim Reports

The average claim for refunds related to PPI policies brings in about £2700, however refunds can range anywhere from several hundred to tens of thousands of pounds. Research published by a prominent financial authority found that just 5% of the policies examined were sold legitimately, with the remaining ninety-five percent considered to be mis-sold as a result of dishonest salesmanship and false information. In fact, nearly 90% of individuals that file claims against their PPI policy are denied assistance under the premise that they are ineligible. Maybe even more disturbing than the large percentage of cardholders are not made aware of their PPI policy, the majority of policyholders never receive assistance with repayments when filing a claim against their insurance policy.


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Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website www.gov.uk/moj/cmr number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit 16, Elysium Gate, 126 New Kings Road, London, SW6 4LZ and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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