More and more of us are finding it hard to cope with the financial strains of everyday life. In the aftermath of the festive period where many of us overspend, there are even more bills to be paid and payments to be made.
So the solution for many is a short-term loan. Payday loans were the go-to for many in need of instant help but high interest rates and mis-selling of these has resulted in bad press and tighter restrictions on lending companies.
This has led to new lending formats developing, one of the most recent of which is a logbook loan. Offering you the chance to get a quick injection of cash secured against your car, they are becoming a highly favoured option for car-owners who don’t have a great credit rating but need a quick financial boost.
How does it work?
We’ve all heard of a mortgage, where you secure your loan against the house you are buying; a logbook loan is similar except you must own the car outright to begin with and then secure the loan against your registered vehicle. It’s like leaving a piece of jewellery at a pawnbroker then collecting it back when you can repay the money.
Your credit rating is not taken into account as the security of the car is all that is needed to secure the loan. The company you go to, such as Loan My Motor, will check over the vehicle and draw up an agreement.
The amount you can borrow will depend on the value of the car but it can be as much as £50,000 or as low as £1,000.
As a short-term loan it has to be repaid over an agreed term of 12-36 months.
Whether it’s for a holiday or to pay off rising debts, a logbook loan offers you a fast and hassle-free solution. Logbook loans are given the same day that you apply, meaning you can get your finances in order as soon as you need to. You can have the money in your pocket in as little as one hour.
The agreement that you sign when you take out the loan means that you’ll know exactly what money you need to pay, and how often, giving you a manageable and affordable debt to repay.
Negative media coverage about logbook loans has crept in due to the high interest rates and possibility of losing your vehicle. It’s true: if you don’t meet repayments continually then your car will become repossessed. But as long as you consider the repayment schedule and can afford it then this shouldn’t be a problem for you.
You can also speak to the logbook loan provider if you are having difficulty with repayments as they will do all they can to help you. You will have full access to the car throughout the term of the loan, making this an effective option for someone who is likely to have no problem meeting repayments.