In today’s world, getting a loan from a bank isn’t always the easiest option—in fact, it’s actually becoming a rarity. Consumers are now looking for alternative options that provide them with a much easier and more convenient way to borrow money. This is especially true for those people who have poor or nonexistent credit scores.
Logbook loans are just one type of alternative lending options that people have been taking advantage of recently. According to Citizens Advice, these loans have increased in popularity by over 60% from 2011. Let’s look at how you can find the best deal for a logbook loan.
The Reputation of the Lender
You’re much more likely to be accepted for a logbook loan than a traditional personal loan, especially if you have a credit score that is anything but satisfactory. This is mainly due to the fact that your car will act as security if you can’t keep up with repayments.
Even though this might seem great, you’ll find that there are lenders on the market that don’t operate as ethically as they should—you’ll notice this by their reputation. Logbook loans are unregulated, and so you need to be extra careful when dealing with lenders.
Some lenders will charge higher interest rates compared to others, but it’s their reputation that you should worry about the most.
How Are You Going to Make Repayments?
If you are planning to take out a logbook loan (or any sort of loan) and you haven’t yet thought about how you’re going to repay the money that you have borrowed, this is simply setting yourself up for financial trouble.
You should go through your finances and check everything as closely as possible—make sure that you are going to be able to afford the monthly repayments.
Even if a certain lender has a higher interest rate, it might be worthwhile taking out a logbook loan with them if they are more flexible with repayments compared to other lenders.
Apart from doing your research, taking the lender’s reputation into account, and thinking about how you’re going to make repayments, there isn’t much you can do to find the best deal for a logbook loan.
So, you can treat this as a “bonus section”. You should always think about alternative options before you go ahead and sign on the dotted line with a lender. If you’re thinking about a logbook loan then you might not have many more options as far as traditional lending goes, but there might be some ways you can cut down on your day-to-day expenses.
When we think about getting a loan, it’s easy to become attracted to the low interest rate that is being shoved in our face. However, there are so many more factors that you need to consider, as we have discussed in the above sections.
Of course, the interest rate is definitely an important factor, but what about the reputation of the lender, the repayment options, and even alternative options? These are all important factors that you should take into consideration before you take out a logbook loan.