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PPI Calculator

Why You Should Use A PPI Calculator Before You Claim PPI

Use a PPI calculator to find out how much you are owed from mis-sold PPI

Before you start your PPI claim, it’s wise to have an idea of what your PPI refund figure should be. That’s where a PPI calculator can be extremely useful.

Why exactly is it a good idea to have this figure before you start your claim? Primarily so you know if the offer you receive from your bank is accurate. Or, as happens a great deal, whether it needs to be reassessed and, in some cases, referred to the Financial Ombudsman Service (FOS) for independent review.

Without an idea of what you should be owed, it’s rather difficult to know if your bank has factored everything in correctly. It also makes it rather difficult to know if they’ve played completely fair with your claim.

A Clean Act

While many PPI payouts are accurate and in line with what the claimant is entitled to, there have been far too many PPI refunds that weren’t. In the latter half of last year, the BBC reported that 2.5 million PPI claims cases were to be reopened because it appeared that claimants had been short changed with their refunds.

For it to happen on such a large scale, it’s probably fair to assume that many of those 2.5 million people simply took their banks’ findings at face value. Had they used a PPI calculator beforehand, however, it’s possible that their PPI refunds would have been very different.

How To Use A PPI Calculator

So how do you use a PPI calculator? If you’re looking to do your PPI calculation yourself, keep in mind that there are several variables involved in the process. These variables ultimately affect the final figure you get from the PPI calculator.

To keep this PPI calculator guide as simple as possible, we’ll assume the calculation is for a single premium policy, which is one of the most common forms of mis-sold PPI.

We’ll need some figures to put into the PPI calculator and, as we don’t know your exact situation, we’ll use some simple dummy figures that you can substitute with your own correct figures.

What You’ll Need to Know

  • The full amount you borrowed when you took out the credit agreement
  • The specific terms of the loan (single premium or monthly premium)
  • The interest rate or APR payable on the loan

Let’s first assume the PPI is on a £20,000 loan, which was taken out over 5 years and which had an APR of 7.9%.

The PPI amount can vary on loans and credit agreements, but it’s often 25% of the loan amount, which in this example would be £5,000. That makes the total loan amount £25,000.

Calculating The Interest on the PPI

We know that the PPI portion of the agreement is £5,000, so we multiply that by the APR amount, which in this example is 7.9%:

£5,000 x 7.9% = £395

That gives the interest for one year, so we need to multiply that figure by 5 to get the total interest over the full term of the agreement:

£395 x 5 = £1,975

Now Calculate Your PPI Compensation

The rulings state that if you were mis-sold PPI, you are entitled to compensation. The compensation is to put you back in the financial position you would have been in had you not taken out the PPI and instead left your money sitting in your bank account, earning you interest.

PPI compensation has been set at 8%, which is a single amount as opposed to being compounded year on year. So…

£1,975 x 8% = £790

Arriving at Your Final Figure

Now you have your three figures – the PPI amount, the interest on the PPI and the 8% compensation – the last step in the PPI calculator guide is to add them all up, which will give you a good idea of what you should be entitled to get back from your bank, assuming your PPI was actually mis-sold:

£5,000 +
£1,975 +
£790 =


Is There A Simpler Way To Use The PPI Calculator?

Not everyone is good with numbers and not everyone wants to go through the full process themselves. Well, there is a simpler way to use a PPI calculator, which is to have the process done for you.

Simply get in touch with us either by calling our freephone number or by popping your details in the short form above, and we’ll get back to you right away to go through the process for you.

Don’t worry, there’s no obligation to take your claim further with us if you choose not to and there’ll be no hard sell either.

PPI Calculator Quick Summary

How you use a PPI calculator is dependent on several variables, such as the type of credit agreement you had and the type of premium (single or monthly), etc.

  • For a single premium policy, take the PPI amount (often 25% of the loan amount, but can be more or less, so check carefully).
  • Multiply the PPI amount by the APR amount
  • Then take that figure and multiply it by the term of the agreement (the amount of years the agreement was taken out over)
  • Now multiply that figure by 8% to get the interest you are entitled to
  • Lastly, add those three elements together – the PPI amount, the interest amount and the compensation amount – to get the final amount you should be entitled to receive from your bank.


Have more questions about using a PPI calculator, or more questions in general regarding the PPI claims process. Feel free to get in touch for some no obligation help and advice.

You can call for free on 0800 840 7290, or if you prefer for us to call you, simply pop your details into the short form of the top of the page. We’ll get back to you for a chat.