You
may not be fully up to speed on what a logbook
loan actually is. Well basically, it is a loan that is secured against your
vehicle, and the finance company keeps hold of the vehicle logbook for the
duration of the repayments. The logbook
(or the V5) is a document that contains the details of the vehicles current
owner, the engine number, the VIN number and registration number.
When acquiring a logbook-loan, the company providing the loan, takes possession of the logbook, but
the person taking out the loan, is allowed to keep using the vehicle. However,
failure to keep up with the repayments means that is very easy for the finance
company to repossess the vehicle in order to sell it on. That is why it is
important to make sure that you have enough money to meet the financial
commitment of taking out the loan, or you may end up waving goodbye to your
treasured vehicle.
As stated earlier, there are other ways to obtain credit,
especially if you are in need of credit in the short term. However, these tend
to take on the form of payday loans, and these have a very high rate of
interest, plus, you can only borrow a certain amount based upon your next lot
of wages. People who have taken out payday loans tell of being caught in a
spiral that requires them to take out further loans in order to pay off the
initial loan.
Payday loans are suitable for some people but are to be avoided
if possible, and logbook loans make more sense, as the companies who provide logbook loans tend to make sure that
the person taking out the loan can afford the repayments.
With the current low interest rates, it is a good time to take
out a loan, however, this does not stop some loan companies charging
extortionate amounts of interest, and typically the shorter the loan period,
the higher the interest. Payday and doorstop loan companies are among some of
the worst for charging very high rates of APR.
Another advantage that log-book-loans have over other methods of
credit, is that you do not need to go through the problem of having your credit
history examined. This can be a stumbling block to many people’s credit
applications, and it can be a waste of time even applying for certain loans if
you have CCJ’s or defaults on your credit file.
Plus with payday loans, you can only borrow a certain amount of
money against your next pay packet, and this can mean that you are not getting
the amount of money that you need. However, with a logbook loan, the amount you can borrow depends on your car, its
age and condition.
Hopefully you now have a better idea about the advantages of
logbook loans compared to other kinds of loans. There are many companies out
there who are in a position to offer you a logbook loan, so you should not find
it too difficult to find one that suits you.
0 comments:
Post a Comment