How PPI Claims Calculators Work
A PPI claims calculator enables you to estimate how much you could be owed from a successful PPI claim.
Consumers hoping to make a PPI claim only have until 29th August 2019 to do so, due to a deadline set by the Financial Conduct Authority (FCA). They are encouraging people to make a claim as soon as possible to find out if they could be due compensation.
In 2015, the average PPI payout was over £2500. Many people are eager to know how much they could be due from a PPI claim. A PPI claims calculator enables people to have an estimate of how much they could receive if their claim is upheld by the bank.
The exact amount that a consumer is owed can take a long time to calculate, as the intricacies of each credit card, mortgage and loan are different. However, based on a few basic facts, an effective PPI claims calculator is able to use some figures to predict a possible outcome.
When using a PPI claims calculator, always be aware that it’s only an estimate. If you understand the logistics and algorithm behind a claims calculator, you can begin to understand how the figure was generated.
How Does a PPI Claims Calculator Work?
There are three basic calculations which will be included when you reclaim PPI. This is a very simple version of what will happen at the bank, so you can begin to understand how a PPI claims calculator works. The complexity will demonstrate how the figure is only an estimation.
1. The PPI policy figure
This is the amount of money you paid for PPI. For example, if you had a loan of £10,000, the PPI policy could have been 20% of that, equating to £2000. This means the total loan amount is £12,000. This £2000 may have been paid upfront or in monthly instalments with the loan.
2. Interest on the PPI policy amount
This figure includes how much interest was added each month on top of the PPI. If the PPI policy is £2,000 on a £10,000 loan across five years, at 7.9% annual interest. The PPI interest is calculated at £158 per year. Across five years, this equated to £790 interest on the PPI policy.
3. Statutory interest for all PPI claims
The statutory interest rate is added as compensation because the bank deprived you of your money. The rate is currently 8% but, prior to April 1993, it was 15%. Assuming that the loan was after April 1993, the compensation is 8% a year on the combined PPI premium and interest from the time they were paid.
The calculations vary for credit cards and mortgages. However, this is the very basic formula for understanding PPI claim calculations.
Where Can I Find a PPI Calculator?
Many PPI claims companies have a PPI calculator on their website. A PPI calculator is simple to use and will only require some basic information. However, if you can’t remember what year you had PPI and how much you were paying, the result could be inaccurate.
The aim of a PPI claims calculator is to offer an estimation as to how much you could receive from your bank. It will likely never be an exact match of the amount you receive, but the more accurate details you have, the more likely it is to match the amount you will receive in total.
If you have a successful PPI claim, the bank will send you a breakdown of the refund amount, including the PPI policy amount, the interest and statutory interest.
Logican creates bespoke software for a variety of companies. The best PPI claims companies use LogiClaim software to manage claims before the upcoming PPI deadline.