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Thinking About Using A Log Book Loan? Read This Article First

By Edited Jun 21, 2015 0 0

If you are one of the many people who are tempted by the easy money promised by the Log Book Loans Companies then you will want to read this article. I'll discuss how much money might be available to you if you take out on of these loans, how they work and problems you might encounter if you go ahead and apply. By the time you have stopped reading this article I hope you will have a clearer idea about whether or not you really want to take a chance with a Log Book Loans Company.

If you don't know already, a log book loan is a credit product which you take out with the loan being secured against your car in the same way that a mortgage is secured against your house. Obviously, with this being the case the value of the loan you manage to get will be directly linked to the value of your car.

The log book loans company will probably tell you that you can get a loan of up to £50000 but getting this amount is highly unlikely. These companies will each have their own formula for working out how much they are willing to offer you but to get a rough idea work out the lowest market value of your vehicle and divide it by two.

So basically the loans are only available to someone who owns a car which has no, or at least very little, outstanding credit on it. You give the company all the details about your car and they consider how much its worth and based on that decide how much money they are going to give you. You agree to make repayments on a weekly basis until the loan is paid off. Sounds simple, right?

The problems with log book loans are the things that no one ever really talks about. First of all the interest rate charged on your loan will be extremely high, usually over 400%. What this means is that on a £1500 loan you'll end up paying back over £4000 and that doesn't take into account any penalty charges that these companies love to pile on for any reason they can find.

On top of the high interest rates there is chance that you'll lose your car if you fail to keep up with the payment. The company will take your car's log book off you when you borrow the money and won't get it back until you are all paid up. Can you afford to lose you motor vehicle? I can imagine that for most people who think they are desperate for cash, losing their car would make things a whole lot worse.

So there you have it, Log Book Loans are credit product that promises so much but usually ends up putting the borrower in a much worse position then when they started. My advice is to stay as far away from these loans as possible, no matter how desperately you think you need the cash.



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