If you have bad credit and you need quick cash, one of the most popular personal loan products available at your disposal is logbook loans. Logbook loans are readily available online offering you flexible loan amounts and terms you can tailor according to your needs.
While popular and accessible, logbook loans also come with its fair share of disadvantages. If you're thinking of taking out a logbook loan, it's best to consider the pros and cons accordingly.
Despite some experts discouraging borrowers from taking out a logbook loan, the financial product continues to be popular in the UK for the following reasons:
If you have bad credit and you need cash fast, logbook loans are readily available. In fact, logbook loans are one of the easiest loans to get approve for. Provided that you own your vehicle and you meet the basic requirements, you can almost always expect to get approved within 24 hours or less. Once approved, you can receive the money within minutes via wire transfer.
With logbook loans, bad credit is no longer a problem since lenders do no run credit checks on their borrowers. As long as you're a vehicle owner, you are welcome to apply for a logbook loan. It wouldn't matter if you have a history of ccjs, bankruptcy or default.
Since logbook loan is a secured personal loan, loan amounts and terms are more flexible. You can borrow anywhere from £500 to £50,000 to cover for any financial need or emergency that may arise. You can also tailor the repayment term according to what you can afford as long as it is within 12 to 36 months.
While advantages in many ways, logbook loans come with risks. Two of the cons associated with the financial product you need to carefully consider are the following:
Seeing that there are no credit checks involved for logbook loans, lenders compensate for the high risks by raising the bar high for the interest rates. In exchange for the quick and easy approval is the high interest rate. On average, the representative APR for logbook loans is at 400% which is multiple times higher than traditional personal loans for people with bad credit.
Then there's also the risk of repossession. With your vehicle as security for the personal loan, the possibility of losing your car is very high especially if you can't keep up with the monthly repayments. After a few months of nonpayment, your lender may use the bill of sale to repossess your car and sell it to cover for your outstanding balance.