When you have bad credit and you need a personal loan, your options are very limited. Because you are tagged as a high risk borrower, chances are high that major banks and high street lenders are going to reject your applications. This is where options such as logbook loans come handy.
Advertised with the promise of quick cash, logbook loans are offered for vehicle owners with bad credit. With a logbook loan, your car is used as security allowing you to borrow anywhere from £500 to £50,000 or up to 70% of your car's official trade value. The loan is repaid on a monthly basis from 12 up to 36 months.
At first glance, logbook loans seem like an excellent alternative to traditional personal loans especially if you have bad credit getting in the way of approval. You can get the money in 24 hours or less. There's no credit check involved so approval is almost always guaranteed. In exchange, however, is the risk of repossession in addition to the high interest rate.
Considering the risks involved, how do you know if getting a logbook loan is financially sound? It all boils to how much you can afford.
Like with any type of borrowing, it's very important to consider how much is suitable for your needs and your budget. It's no longer a matter of whether a logbook loan is right for you or not but a matter of whether you can handle the monthly repayment or not.
If you think you can stick with the monthly repayment until end of your loan's terms, taking out a logbook loan to meet any financial need shouldn't be a problem. Just make sure that you know exactly what you are getting into before you sign the credit agreement. As a simple rule, it's also best to consider other cheaper alternatives first before you go for a logbook loan.