Logbook loans at the moment are receiving a lot of bad press in the light of the financial regulatory reforms being undertaken by the FCA (since they took over legislative authority from the Office of fair trading).
When faced with the question, should I avoid logbook loans?
There are some major things to consider:
- Do you feel confident that you can make the repayments on the finance you intend to borrow? Particularly important due to the fact that if you default on the loan then you will likely be pursued for the repayments, and also, in extreme cases it is even possible that the vehicle you have put up as collateral for the loan could even be repossessed.
- Can you get a loan with the banks or some other financial corporation? Check this first because the interest rates will almost certainly be MUCH MUCH lower with the banks, even other types of bad credit loan are usually cheaper in terms of the interest rates, logbook finance is a bad credit loan option that is intended for people who cannot get more conventional loans due to having a poor credit score.
- How Much Do I Need To Get My Hands On? Put Simply, the more that you borrow, the more you must pay back, take this into account when doing your financial planning for the month ahead, you must have enough disposable income to cover the repayments, otherwise there could be serious implications as a result of neglecting to check this over.
- Are you comfortable with the interest rates? This also has a bearing with the above point about repayments and the amount of money that you borrow, as the its not just the loan amount that impacts the repayments but also the interest rates, AND ALSO….
- The Loan Repayment Term, is it manageable? You want to check to make sure that you can repay the loan over an acceptable period of time so that your monthly finances are manageable, this point is relevant to all the points above.
In summary, there is no fooling around with these loans, you should only get one if you can afford it because the implications are no joke.
If you feel uncomfortable at any stage of the proceedings of getting a loan then you need to ask the right questions to the company you are putting in an application with, be sure that you are making the right decision.
- The positive side of things used correctly, and if affordable to you, logbook loans can be as useful as many other types of finance, yes they are costly, but the amount of money that can be made available to you can be much higher than more traditional loans, (with logbook loans of certain types you can borrow up to £50,000) the main alternative to this would be a secured loan, and with secured loans these are secured against your property which if defaulted on you can lose your property! (however loans secured against a property are much cheaper of course).
Used responsibly logbook loans can be a powerful utility for unforeseen expenses. To apply for a logbook loan visit the homepage in the link above.