With the recent economic turmoil in the world, it’s little surprise that many people are struggling to find ways to get cash-in-hand quickly˳ For this, short-term loans have often fitted the bill perfectly˳
But as many banks have also been hit by the recession, they are increasingly wary of lending to consumers˳ As a result individuals are forced to seek alternative means for a cash loan˳
A market that cropped up to meet this need was the payday loan scheme˳ However, those that examine the terms and conditions of such loans carefully may in fact notice that a logbook loan is more suited to their needs, and comes with lower risks than a payday loan˳
What is a Logbook Loan?
A logbook loan is a loan granted against your vehicle’s V5 document or “Logbook”˳ It is an easy method of loan as they do not check credit history˳ It is generally approved within a day and requires very less paperwork˳ Though it has a requirement, ie˳ the vehicle should be finance free and should not be more than 12 -13 years old˳ Still, it is considered as a better alternative to Payday Loans because of low interest rates and flexible repayment options˳
Here’s a few reasons that a logbook loan may be the more suitable option:
1˳ Interest rates are significantly reduced˳
Although payday loans may seem a quick-fix for cash in hand loan, many individuals fail to consider the high interest rates that such loans come with˳
Payday loans can sometimes come with APRs topping 4,000%, leaving borrowers paying back a substantially larger sum than they originally borrowed˳ It does little to help your cash flow stabilize, which is what loans are intended to do! If you don’t repay it quickly, you may find yourself facing a potentially debilitating debt˳
Logbook loans however, are secured against the worth of the borrower’s car, which generally means that the APRs are far less, meaning it’s a more manageable debt and easier to pay back˳
2˳ Potential for larger sums in loans
While payday loans may hold an appeal in that they require virtually no collateral, leaving it as a no-strings attached type loan, if you already own a vehicle you have a high-value asset in your possession˳ This asset can be used to help obtain a logbook loan, which then in turn gives you access to a greater potential sum to loan˳
Although it depends on the value of your vehicle, logbook lenders may offer loans ranging from £200 up to £25,000˳ It doesn’t matter if you are considered to be self-employed, or if you have a less than stellar credit record˳ Your car is generally the second most valuable asset you would own, and you can make that asset work harder for you in securing a log book loan˳
3˳ Loan periods are more easily managed
Payday loans are designed to be a quick-fix, that is a short-term solution˳ What that means, is you’ll have to repay the loan within a relatively short period of time˳ If the borrower cannot secure the funds to repay the loan, the interest quickly builds up˳ This leaves borrowers at times forced to take out a second loan merely to repay the first loan!
Lenders offering logbook loans however, can set it up so that you can repay the debt over a far greater time period, anywhere from half a year up to three˳ In addition, borrowers can sort out a repayment plan to match their cash-flow needs, which guarantees you can pay back your debt in a timely and stress free fashion˳
Source by https://ezinearticles˳com/?What-Makes-a-Logbook-Loan-More-Suitable-Than-a-Payday-Loan?&id=7416392
