Pros and Cons of a Logbook Loans

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If you have a poor credit history, your personal loan options are limited. Among the most popular and most accessible options you have at your disposal is a logbook loan. While easy to get approved, it’s also important to note that logbook loans come with a number of advantages as well as disadvantages. Here’s your quick guide to logbook loans’ pros and cons:

Pros

When it comes to advantages, logbook loans are better than other loan options because of the following:

Available online – Logbook loans are available online, which means no need to go to an office to avail a personal loan. You just need to complete an online application form to get a free quote and go from there. If you’re ready to compare the best logbook loan deals, just head over to http://paydayloans.money.co.uk/logbook-loans.htm.

Large loan offers – With your vehicle as collateral for your personal loan, lenders can offer larger loan amounts. In most cases, you can borrow up to 70% of your vehicle’s trade value so long as it’s within the £500 to £50,000 range.

Longer repayment terms - With larger loan offers, it follows that the repayment terms are more flexible. That means you can pay your loan longer, usually between 12 months and 36 months either through bi-weekly or monthly repayments.

No credit checks–But more importantly, logbook loan lenders do not need borrowers to have good credit. No credit checks are ran on customers hence fast loan approval. Approval rates are also higher. In fact, most logbook loan applications are usually good as approved provided of course that you are a vehicle owner and you meet all other requirements.

Cons

As for the disadvantages, here are some things to keep in mind if you’re applying for a logbook loan:

Highcost–With no credit check needed, lenders offset the high risks on their end by raising the cost of the loan. In comparison with traditional personal loans, logbook loans are multiple times more expensive in terms of interest. On average, logbook loans come with a representative APR of 400% or sometimes even more than that.

Repossession–Another major disadvantage with logbook loans is the risk of vehicle repossession. With your vehicle as collateral for the personal loan, you are essentially putting your asset at risk. You may lose your car in the event that you are unable to meet the terms of the loan. Several months of missed payments, for example, may lead to repossession especially if you fail to respond to your lender’s reprimands.

Are logbook loans for you?

Considering the pros and cons, you should be able to intelligently determine if a logbook loan is for you. The trick is to make sure that the advantages outweigh the disadvantages. And so long as you can commit to repay your monthly dues on time, you shouldn’t encounter major problems along the way.