Many financial experts will tell you to steer clear from logbook loans because of the high cost and the high risks. While they may have good points, it’s not always easy to do especially if you have bad credit to deal with.
For most people who have ever been refused a personal loan by major banks and lenders because of bad credit, logbook loans offer an alternative solution you can use to take care of any pressing financial needs. Whether you have overdue bills to pay or you need cash for an important investment, logbook loans are worth considering. Just remember that the promise of quick cash comes with strings attached. In logbook loans’ case, the strings include the high interest rate and the risk of vehicle repossession. More at this topic can be found at http://www.simplelogbookloan.co.uk/
If you’re in the market to take out a logbook loan, it’s best to know the true cost of the financial product before going through with the application. And no, it’s not as complicated as most people think. At its simplest, we’ll basically just need to focus on two key factors.
The Interest Rate
First is the interest rate. APR which stands for annual percentage rate is the financial concept lenders use to advertise their logbook loan offers. They specifically use representative APR which means that it’s not the actual interest, just the representative that you may or may not get when approved for a logbook loan.
For logbook loans, the average representative APR advertised in the market is 400%. But thanks to tougher competition among lenders, the interest rate has significantly become cheaper over the years. One of the most affordable logbook loans available in the market today is that offered by Varooma Platinum Logbook Loan.
With Varooma, you can borrow anywhere from £5,000 to £150,000 at repayment terms from 3 months to 2 years at Representative APR 98.05%. That’s a pretty good deal if we must say so ourselves. To illustrate how that translates to monthly repayments, let’s say you want to borrow the minimum loan amount. That’s £5,000 at a flat rate of 43% fixed p.a. If you wish to repay the loan over the course of 18 months, you will end up paying a monthly repayment amounting to £456.94 or £8,225 in total.
The Possibility of Repossession
Other than the hefty interest rate, one other reason financial experts do not recommend resorting to a logbook loan is the risk of repossession. When you take out a logbook loan, you are essentially securing the loan against your vehicle. Not keeping up with the monthly repayments means your lender may seize your car and eventually sell it to cover your outstanding balance.
Before the repossession, borrowers are given ample time to keep up with their repayments. Your lender may sic their debt collectors on you at home. If you’re still unable to repay the loan after a given time, that’s when repossession is enforced as dictated by your logbook loan’s terms and conditions.
Should You Take a Logbook Loan?
Obviously, no one wants to lose their cars to a lender because of an unpaid logbook loan but the incident still happens to many borrowers anyway. That doesn’t mean it will happen to you as well. At the end of the day, it’s still all about knowing what you’re getting into.
As borrowers, the responsibility to borrow with caution lies on your shoulders. Regardless of the high interest rate and the risk of repossession, if you’re committed to borrow responsibly enough, logbook loans offer you an easy way out even if it may be costly.