Pros and Cons of Logbook Loans
If you're looking for a quick fix solution for your pressing financial problems, you may want to check out logbook loans. While quite controversial, the financial product is quick and easy to get approved for especially if you have bad credit. Like with any other types of loans, however, it pays to weigh the pros and cons of the product.
Logbook Loans Pros
Logbook loans are popular because of the following advantages:1. Fast processing
Logbook loans literally are one of the fastest ways to raise funds when you have bad credit. More and more lenders are in fact now offering same day approval deals. So long as you meet the requirements and you have the documents ready, you can get approved within the same day you applied for the loan.
Whether you need a small sum or a large amount for your personal needs, logbook loans offer flexible loan amounts and repayment terms. You can borrow anywhere from £500 to £50,000 to pay overdue bills, cover a medical expense or for a major investment. Repayment terms, on one hand, start from 12 months up to 36 months or longer depending on your arrangement with your lender.
Best of all, logbook loan lenders do no require any credit check. Even if you've been refused a loan elsewhere, you can still avail a logbook loan provided that you meet the requirements and you own your vehicle to secure your loan against.
Logbook Loans Cons
While advantageous in a number of ways, logbook loans are not without its disadvantages. Below are risks to think about before signing any dotted line:1. High interest rate
One of the main drawbacks with logbook loans is its high interest rate. This is the high cost of the loan product's quick accessibility. As a way to compensate for the high risks lenders are taking for customers, they raise the interest rate not to mention that there are hidden fees racking up the loan's total cost.
On average, logbook loans come with an average representative APR of 400%. To know more about APR and how it works, click here.
2. Vehicle repossession
Then there's also the matter of vehicle repossession. In the event that you are unable to repay the loan, your vehicle is at risk. Your lender will usually give you enough time to catch up with your repayments. If you can't still handle the monthly dues, this is when your lender may repossess your car as per the debt agreement. The lender will then sell the car to cover for your loan's outstanding balance.
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