Logbook Loans: an Alternative to a Payday Loan
Everybody knows what it’s like to be stuck for money and I’m certain most of us have had that sinking feeling when an out of the blue expense crops up right at the end of the month. Keeping our heads above water at times such as these can feel impossible but the stress of having to scrimp and save has definitely been made easier by growing access to short-term loans.
Most people will know of the Payday loan phenomenon and some who have experienced short-term financial difficulties or cash flow emergencies may have even benefited from one. Payday loans have become very popular but for some, making a full repayment within the time constraints of one month has proved difficult leaving the floodgates open for alternatives such as Logbook loans.
Recognising a niche for people needing instant cash but without the demanding pay back pressure, a Logbook loan enables individuals to acquire money against the value and security of their vehicle for an extended time period of time. Typically, these types of loans allow a borrowing period of anywhere between one and six months although extended repayment plans are offered by some lenders.
As with payday loans, logbook loans are a great way for people with bad credit to get their hands on some much needed money. The beauty of a logbook loan is that prospective customers can borrow a significant sum with selected loans reaching up to ?50,000. Before you get carried away and expect ?50,000 to drop into your lap, I should add that loan agreements are determined by the current value of your car; most lenders will loan 50% of the value of a vehicle although some lenders offer up to 75%
Can I secure a loan against any vehicle?
Any vehicle possessing a V5C document (logbook) and worth over ?500, or ?1,000 for some lenders, can be used as security to borrow money. Typically these vehicles will be made up of cars, vans motorbikes and lorries but borrowing against caravans, boats and yachts is also feasible.
To be eligible for a logbook loan, customers must possess vehicles generally less than ten years old although valuable classic cars are often accepted. If you’re vehicle is still under a finance agreement then providing that the repayments are almost at an end, it too could be used as security for a logbook loan.
Benefits of a logbook loan
Logbook loans may not yet be as common as payday loans but they undoubtedly offer some advantages over other short-term agreements:
. Short term savings
Paying back a logbook loan early could see you parting with less cash than a payday loan. With repayments typically being 10% per month of the amount borrowed, a ?1000 loan could see you paying back ?1,100 if paid back within a month. The same amount and identical timeframe within a payday loan agreement however would incur ?250 worth of interest totalling a repayment figure of ?1250.
. Borrow money for longer
The fact that money is offered over longer durations can be comforting to some people. Although logbook loans allow you to borrow money for a reasonable length of time, they should only ever be used for emergencies rather than as a solution to continual money struggles. Some sound advicewould be to pay as much as you can comfortably afford each month to guarantee minimum interest fees.
. Personal
Initial applications are done online but the remainder of the process is conducted in person. After the online application has been filled in, a visit to the loan provider is required to check the vehicle’s documents. At this stage, customers also discuss the loan agreement with the lenders.
. V5C versatility
Where a successful payday loan application is determined by your salary, a logbook loan is determined by the ownership of a vehicle and allows for a wide number of vehicles to be used.
So where’s the catch? Well, put simply, there isn’t one. As long as you are the owner of a vehicle, borrow a reasonable amount and stick to your repayments, all should be fine and dandy.
To understand more around logbook borrowing and how they function in the England, view the following resources:
LogbookUK Offers Log Book Loans Almost everywhere in The British Isles
Logbook Loan Branches
www.logbook.co is a Logbook Loans Directory website for cars and other vehicles in the British Isles
Log Book Loans
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