The Link between Logbook Loans and Personal Credit Score

If you have a poor credit score, requests for a loan from conventional lenders will be rejected on first sight. You are a great risk and lending any cash to you is considered a great liability. The only place left to get credit is from lenders who do not factor the personal credit score such as logbook loan companies.

While it is true that the main factor that most logbook loan lenders are interested in is the capability to repay, there is a clear link to credit score. In this post, we bring out this link and demonstrate why you should make improving the credit score a priority.

Default can be reported to credit reference bureaus

When people take logbook loans, the likelihood of sinking deeper into financial turmoil is very high. In addition to the common risks such as losing the family car and hefty penalties, the lender can report cases of default to the credit reference bureau. This means that your credit score will become worse.

Because logbook loan companies are legal entities, they can file default reports directly to the credit reference bureau or capture the details in their bank details. In either way, the credit reference bureau will note you and degrade the credit score until the entire loan is cleared.

Logbook loan lenders can assist clients to fix poor credit score

Though your credit score is already poor, the logbook loan dealer can assist to address it. However, many people rarely appreciate this special role of the logbook loan lenders. If you select the logbook loan company carefully, the lender can assist in the following ways;

  • Helping you understand personal credit score and how it works
  • Helping you craft a good financial strategy for clearing loans and marching to financial freedom

Do not simply look at the logbook loan companies as entities out to make the highest possible profits. They also want to create a good image from a clients’ viewpoint. This will make them win more customers. Remember always to engage the lenders early enough before things get out of hand.

Allowing the lender to automatically draw monthly payments can worsen the credit score

One of the methods used by borrowers to prevent forgetting regular monthly loan repayment is allowing the lender to automatically draw from the account. This means that you can stop worrying about the loan because all monthly payments are cleared on time. However, if your salary is late or cash is not enough, the lender can get an overdraft. This will sink you deeper into financial trouble because it is still a form of borrowing.

Logbook loans often make people forget other loans

The risks that come with logbook loans are very many. To avoid them, many people prefer directing as much cash as possible to clear the logbook loan at the expense of other loans. Consequently, the factors that pulled down the credit score remain unattended. This means that by the time the logbook loan is cleared, the credit score will still be poor. Therefore, it will still be impossible to get a loan from the bank. The chances are that you might end up taking another logbook loan.

To sail through a logbook loan effectively and draw more value, it is important to plan appropriately. You need to think about repayment and how to address the damaged poor score. If you find it too much, do not hesitate to seek assistance from a financial expert.

 

4 Things That Land People into Financial Problems after Taking Logbook Loans

A logbook loan is a credit line of last resort. Many people only resort to it after all the other avenues are exhausted. The risks involved in taking a logbook loan often push many borrowers deeper into financial turmoil. Despite these risks being known and highly publicized, a lot of people still find themselves sinking deeper into financial trouble after taking logbook loans. This brings us to the question; what are the main reasons that land people in more trouble after taking logbook loans.

Not picking the right logbook loan lender

The logbook loan lender you pick is the main determinant of the success to anticipate during repayment. If the logbook loan company has a very high-interest rate, you will have a huge repayment burden. But the interest rate is not the only thing to look for when picking a logbook loan company. You should also focus on checking the following things;

  • Check for a lender with good terms and conditions for the loan
  • Only work with the company that does not include unnecessary/hidden charges
  • Select the company that has a good reputation in the UK

 

Drawing a poor credit repayment plan

Once you decide to go for a logbook loan, the greatest mistake one can make is drawing a poor repayment plan. A bad plan will make it difficult to follow with monthly payments and result to defaulting. To draw a good plan, you need to factor the revenue available and focus on clearing all the available debts. If the revenue streams are not enough, you might need to consider areas of austerity in personal lifestyle. Make sure also to factor other personal expenses.

Directing all personal revenue into clearing the loan only

While it is true that some loans such as payday and logbook credits are very risky and require special focus, directing all personal revenue there is a big mistake. Just like an issue arose and forced you to take a logbook loan, there is no guarantee that a new problem will not emerge along the way. Therefore, while the bulk of the revenue should go towards clearing the risky loans, a significant portion should be directed towards creating an emergency fund. If there is no emergency fund, even small issues will force you to get a new logbook loan.

Working on the logbook loan without focusing on improving credit score

The main reason that pushes many UK citizens to borrow from logbook loan dealers is poor credit score. But many are the people who forget about this reality the moment logbook loan cash reaches in their accounts. However, this is very dangerous because you will still be in the same trouble that made you look for logbook book loan.

Once you get a logbook loan, it is important to start crafting a way of raising the credit score. This should start from understanding the causes of poor credit score and starting to address every issue that had lowered the personal score. For example, you need to start building a good credit history, clear the outstanding loans and get the right credit mix.

While the logbook loans have received a very negative publicity, the truth is that you can wade through and emerge a better person financially. Always remember that the key to financial success if good planning. Simply plan well, make some austerity measures, build an emergency fund, and increase the streams of revenue are the initial steps towards financial freedom.

4 Benefits of Making Your Logbook Loan Dealer A close Friend after taking a loan

When you decide to borrow a loan, the lender should be a close friend. If the lender is a conventional bank, the services offered will go beyond the loan. In many cases, the services could be the missing link to help your business march to the next level. However, when the credit score is low, the available loan options are very few. One of these options is the logbook loan.

A logbook loan is a form of credit secured against your car. It is considered the option of last resort because of the multiple risks involved. If you take a logbook loan, it is very important to prepare appropriately. More importantly, you should make the lender your closest friend to enjoy the following benefits.

Easier negotiation on APR and loan agreement

Many people hold the view that logbook companies have fixed interest rates. This is a misconception. Unlike banks that have the same interest rates all the branches across the UK, the logbook lenders operate differently. If you take the right approach, the lender will adjust the rates for you. When you make the lender a close friend, it will be easy to negotiate for better APR.

The best way to have the rates adjusted downwards is presenting an offer. If the lender has an APR of 210%, go ahead and present what you consider ideal for you. For example, ask the lender to give you a loan with an interest rate of 150% APR. The lender will have to talk to you for a better rate such as 170%. The drop will be significant when calculated over a number of years.

Assistance with improving personal credit score

The main reason that has landed you at the logbook loan dealer is poor credit score. After getting turned down by banks, it is only the logbook loan companies that are willing to assist you. However, making the lender your friend will make him go an extra mile in assisting with credit score improvement.

  • The lender will help you understand what credit score is and identify where things went wrong in your situation.
  • As a friend, the lender will assist you to craft a debt management plan. This will not just help in clearing the logbook loan, but all the other debts too.

Avoiding falling into further financial woes

Now that you have borrowed from a logbook company, it is important to appreciate that issues can arise and force you to default. For example, if you lose the only source of income, the chances are that the lender will recover and sell the car. But it does not have to be that way if you are a close friend to the lender.

  • The lender will help you identify areas of austerity and directing the cash to clear the loan.
  • Good lenders will assist you to automate monthly payment to avoid unnecessary penalties.
  • If repayment becomes completely impossible, the lender will assist you to weigh the options of last resort such as selling the car.

Support in increasing personal streams of revenue

The moment you settle for a loan, everything narrows down to budgeting. While you might have thought that all the sources of revenue are exhausted, a good lender will demonstrate how to raise extra cash while keeping the expenses minimum. Here are some great examples.

  • Redesigning your home to make some rental units.
  • Using the garage to run a side business such as baking cakes
  • Doing part-time job in your area of profession to raise additional cash
  • Working online in your area of specialization to raise more cash

When you identify a good lender, it pays to consider him a personal friend. As you put a lot of effort in clearing the loan, a friendly lender will give helpful advice on creating new streams of revenue and marching to financial freedom.

 

Making Your Logbook Loan A Stepping Stone to Financial Freedom

Every time that the name logbook loan is mentioned, what comes to people’s minds is a person who is in a financial crisis. This is true. In many cases, people looking for logbook loans have a very low credit score. This makes banks to reject their loan applications because of the high risks involved. However, getting at this point does not mean you cannot reach financial freedom. Here is the story of Michelle Grogan who overcame all odds to become a better financial manager after taking a logbook loan.

How Michelle sank into financial problems

Michelle Grogan, an industrial worker at a Bakery in London, was living a great lifestyle. As a single mother of one daughter, she felt successful because she had just completed paying her mortgage. However, she still had many loans that required a couple of years to clear.

In spring of 2015, Michelle’s daughter fell ill and was admitted to hospital for 6 months. This drained Michelle’s resources leaving her with no money to service her loans. Two months before her daughter was discharged, she took a logbook loan of £3500 against her car to cater for the fast-growing expenses.

Things ran from bad to worse when she lost her job a month after her daughter was discharged. At that point, she was pressed by the different debts, the logbook loans, and other expenses that come with taking care of a sick person.

Getting out of financial trouble and walking to financial freedom

  • Seeking and implementing recommendation of a financial expert

Seeing that the remaining sources of revenue could not cater even for the logbook loan, she had to seek an urgent solution.

  • She sought assistance from a financial expert who advised her to consider selling the car immediately. But this could not be done directly because the ownership documents were already deposited to the logbook loan company.
  • To get more from the car, Michelle searched for a buyer and went with him to the lender. She explained her situation, and the vehicle was sold for its total value of £ The lender deducted his loan of £3500, and the remaining £4000 was deposited in Michelle’s account.
  • Opening a new stream of revenue

The financial expert did not stop there. He was very concerned that even after clearing the logbook loan, Michelle’s problems were far from over. She had to also clear other loans. Therefore, she recommended that Michelle start a business to get new streams of revenue for clearing the remaining debts.

She converted her garage into a bakery and acquired baking equipment using the £4000 from the car sale. She also opened a website and started selling baking related recipes. With her daughter assisting with website administration and managing orders and Michelle working on deliveries, the business grew rapidly.

They enlisted services of another employee who helped to raise production and revenue. So successful was Michelle’s bakery by June 2017 that she incorporated her baking companies as bigger orders came knocking.

  • Improving personal credit score

As the company grew, Michelle designated some cash for clearing other loans. By mid-2017, Michelle had cleared all the loans, and the banks were now approaching her to assist with loans. By roping in the financial expert who assisted her, Michelle is walking towards financial freedom by implementing the following things;

  • Setting enough emergency plan to cater for any emergency
  • Insuring the business and her family’s lives
  • Diversifying investment by acquiring bonds and new real estates
  • Buying shares in other highly successful companies
  • Teaching her daughter about budgeting and financial management

Sinking to the bottom of financial trouble does not mean you cannot rise and be successful. Even if you take a logbook loan because of poor credit score, make sure to get expert advice on financial management. If Michelle managed to get out of debts stronger, you too can march to financial freedom.

Why You Should Seek Assistance from a Financial Expert after Taking a Logbook Loan

The number of people taking logbook loans in the UK and defaulting several months down the repayment line is very high. The moment you end up knocking the door of logbook loan lenders is a clear indication that there is a problem and urgent assistance is necessary. Recently, laws have been passed to regular the Payday loans to try and cushion the borrowers from harmful practices. However, logbook loans are not well regulated, and many borrowers end up paying a lot in interest charges. Many have fallen deeper into financial woes after defaulting repayment of their logbook loans.

To prevent the logbook loan from becoming a debt trap, it is important to seek expert assistance. In this post, we establish why seeking expert assistance is very crucial after taking a logbook loan.

Financial experts help borrowers trace back the source of their issues

Financial professionals handle issues from clients with even worse situations in the past. The secret of getting out of the current issue is to understand its genesis. The experts will help you trace the origin of the financial woes and use simulations from other clients to look for realistic solutions. For example, you might have sought an emergency loan from a bank and subsequently lost your job. This can throw the repayment efforts into a dilemma.

A financial professional will help you to carefully look at personal lifestyle and create important financial pillars to cushion unexpected demands. For example, an emergency fund can provide all the funds for media assistance so that medical issues do not warrant seeking a loan.

Experts are important in drawing debt management plans

If the banks declined the application for loans, one of the main reasons might be poor credit score. Those with poor credit score are considered too risky, and banks prefer turning down their requests. Though you used the logbook loan as an alternative, a proper debt management strategy should be developed. This is where the financial expert comes in.

The finance professional will help you pick the right repayment strategy for faster clearance and freedom from debts. Depending on your situation, the financial expert might recommend the snowball method that involves attacking the debts starting with those that have low balances. Then, the repayment gains momentum as you clear the small loans until all debts are settled.

It becomes easy to improve personal credit score

While it is very clear that poor credit rating hurts personal ability to access loans, getting a higher score is never easy. Many people try for years only to find the score moving from poor to worse. However, a financial expert will make the efforts towards improving the credit score simple, realistic, and fast. Some of the best strategies recommended by experts in the UK include;

  • Borrowing from a personal account to build good history
  • Identifying areas of austerity to ensure that all the outstanding debts are cleared on time
  • Not overlooking even the common utility bills. They can also harm the credit score if referred to debt recovery companies
  • Checking and correcting errors in personal credit report with credit reference agencies

Borrowers can easily advise on additional streams of revenue

For many people seeking logbook loans, the argument is that they have run out of options. Well, a visit to a financial expert will surprise you because of the many alternatives suggested for generating additional resources. One good example is identifying areas of austerity that can release some cash. If you visit the theatres downtown every weekend, you can make some savings by subscribing to online movies. For others, a personal blog on an area of interest can help generate some extra revenue to help clear debt faster and accelerate you to financial freedom.

 

Three Things That Determine Whether a Logbook Loan Will Become a Debt Burden

Was your loan application from a bank declined because of poor credit score? Many people who get turned down find solace in logbook loans. The logbook loans are provided against your car and can be processed within a very short time. Logbook loan dealers do not factor credit score when issuing loans but only review the applicants’ ability to repay.

Once you decide to take a logbook loan, it is important to understand all the associated risks and how to avoid them. In many cases, borrowers end up defaulting on the loans because they also have other obligations. In this post, we evaluate five crucial things that determine whether a logbook loan will translate into a financial burden.

High annual percentage interest

One of the main characteristics of most logbook loans is that they come with very high-interest rates. Many of the lenders keep the interest as high as 400% which can make you pay the amount borrowed over 4 times. This high-interest rate can easily make the loan a serious burden in the following ways.

  • The high-interest rate makes the amount used to service the loan too high and leaves no cash for other expenses.
  • Because of the high-interest rates, many borrowers are forced to forego a lot of things that bring strain in their lives. However, they can only hold for a short time before starting to default.
  • If you had allowed the logbook loan dealer to withdraw the monthly deductions from the bank, delays in your salary can trigger unnecessary overdrafts and deepen the debt burden.

To address the issue of high APR, it is very important to carefully evaluate the lender and only pick the one with the lowest rate. Besides, you can negotiate to have the APR lowered.

Taking the loan over a very long period

Just like other loans from conventional banks, the rule is that; the longer the repayment period is, the higher the amount a borrower pays. However, there is a more serious problem that could draw you in the sea of debt if the logbook loan is repaid over a long period.

Taking into consideration that the interest rate is already very high, commitment to pay over a long period can cause fatigue. For example, though you have addressed the current issue, it does not mean that another one such as medical emergency will not arise a few months down the line. If future issues arise (which is very probable) the risk of default is very high. This will attract serious penalties and could make the lender to recover the car.

To address this problem, it is important to try and limit the repayment period to the shortest period possible.

Borrowing more than one requires

Though the banks have declined to lend you cash, it should not motivate you to take the maximum available amount being offered by alternative creditors. For example, if you wanted to borrow 1000 pounds to address a medical emergency, going for 5000 pounds because the lender is willing will be a grave mistake.

  • There is a risk of improper use of the cash because you had not planned for it.
  • The borrower will also pay more because the interested calculated on a larger amount is bigger.
  • The debt will be repaid over a longer period which can cause fatigue and raise the risk of default.

It is advisable to carefully assess your ability to repay the loan and only borrow what you need. Note that this means a careful evaluation of all areas of personal lifestyle to determine your repayment capability.

 

How to find the right logbook loan lender

Starting a logbook loan business is not as difficult as establishing a bank. So, don’t be so surprised that there are more V5 loan lenders out there than banks. When it comes to logbook loans, finding the right logbook lender may not be as easy as you think. Since there are a number of them out there, choosing one can be quite overwhelming!  Where do you begin? What should you search for in a lender? All these are questions you should ask yourself when picking a lender. Don’t worry though. Learn how to find the right one below.

Consider flexibility

When searching for a logbook lender, you need to know how adaptable they can be to your requirements. Take this situation for example. Most loan providers require that your vehicle be less than 10 years old in order to qualify for a loan. So, what if your car is older than ten years? Can the lender adapt to your situation? You need to make sure you know this before you apply for your loan. Otherwise, you would be wasting time. Luckily for you, there are some logbook loan lenders that can issue cash for vehicles that are over ten years old. They are not even that difficult to find. You could even search online. What you want is a lender that will satisfy your every need.

Compare quotes

If you have faced a personal financial crisis before, then you should know how easy it is to make the wrong decisions. Although you might be desperate for some cash, it’s important to ensure that you make rational decisions. Yes, loans could help you out but they also have their downside too. The last thing you want is paying logbook loan at almost double the principal amount you borrowed. Therefore, you need to thoroughly compare and contrast the quotes of various logbook lenders in the market.

Thanks to the internet, you can check out some of these quotes online. Have a look at the APR’s and select the one that is most favourable to you. Additionally, remember to check the repayment period. Usually, shorter periods have higher interest rates than longer periods. However, you might end up paying more interest in the long run. So, you need to be very prudent when it comes to this.

Ask around

It never hurts to ask around for a logbook loan lender. Spread the word that you are looking for a lender. Tell your family, friends, or even neighbours. You’d be surprised at some of the references you might get. Sometimes, your network can be more valuable than you think. Perhaps some of your loved ones have acquired logbook loans before. In some cases, you could even land a better quote just because your friend or brother connected you to a lender. However, don’t just run toward any referred lender. Do your due diligence and carry out your own background check.

Make use of the internet

Thanks to innovative technology, you now have access to unlimited information over the internet. So, why not take advantage of it and find logbook lenders online? While doing this, remember to start by searching for reputable logbook lenders in the UK. Always check out the ratings and reviews. What do other customers have to say? One comment can give you a lot of information and perhaps even better references. Apart from reviews and ratings, the internet would give you access to a wide variety of quotes for you to choose from. Sometimes, you could even get your loan online and thus save time and money.

How to Reduce the Risks That Come With Logbook Loans

The risks that come with taking a logbook loan are numerous. As an option of last resort, logbook loans have become synonymous to high-interest rates, regular depression for borrowers, and the ultimate reality of having the car repossessed. With the family car being the second most important asset after the house in most cases, the risks involved can be too dire. In this post, we evaluate five ways you can reduce the risks that come with logbook loans.

Shop for the lender with lowest APR

While most logbook loans come with high annual percentage rates, the variation between different companies is very high. You can get a company that charges as high as 420% while another one only does 100%. It is, therefore, very important to look for the lender with lower interest rates to keep the burden of repayment lower.

Avoid penalties on early payments by carefully reviewing the agreement

If you read carefully through many logbook loan agreements, there are clauses that limit borrowers to repaying the credit only during stipulated timeframes. This means that if you have committed to clearing the loan in 24 months, there is no option of repaying earlier. You can note such offensive clauses by carefully reading through the agreement and insisting they are removed before signing. A good logbook loan dealer will even motivate you to clear the loan faster with reduced interest.

Prioritize the logbook loan repayment compared to other lines of credit

After taking a logbook loan, you need to appreciate that the dangers that come with defaulting are higher compared to other forms of credit. For example, if you have a credit card loan, it will only accrue interest, but no one will come for the family car or threaten to sell the house. However, defaulting on the logbook loan means that your car will be repossessed and sold. In fact, it could be worse than repossession and auction. If the lender sells the car but fetches less than the remaining loan balance, you will still be followed to clear the balance. It is, therefore, very critical to prioritize the logbook loan to avoid repossession.

Stay in touch with the lender and build trust

Every lender, from banks to logbook loan dealers, wants to deal with clients they can trust. This means being in touch and following the agreement for repayment. Even if you encounter some hitches with repayment for a couple of months, the trust between the two parties will make it easy to renegotiate the terms. For example, if you are late to remit the monthly payment because of delays on your salary, the lender will appreciate and allow you to fix it without repossessing the vehicle.

Ask your bank to make direct payment to the lender every month before the due date

Because of busy working schedules, it is not uncommon to find borrowers forgetting to remit money for their logbook loans. Others only remember when it is very late and ends up incurring unnecessary penalties. However, you can avoid these additional costs and risks by asking your bank to remit the cash every month a couple of days before the due date. The bank will only notify you that the payment has been made so that you can concentrate on other tasks and optimize personal output at the workplace.

Final verdict

While the logbook loans are options of the last resort, it is important to understand them and avoid falling deeper into financial troubles. By avoiding the risks using the outlined measures, you can plug the current financial gap and emerge stronger.

How to Win Trust in Your Bank after Taking a Logbook Loan

Many people who turn to logbook loans consider them the option of last resort after other applications are declined by conventional banks. However, logbook loans are only a short-term solution to your financial problems. Within a couple of years, you might require a bigger loan to finance other projects such as real estate operations or even business. Therefore, the faster you get through with the logbook loan, the better. More importantly, you need to start building trust with the bank so that they consider you a less risky party. Here are some useful tips on winning trust from banks.

Ensure to keep the accounts with the preferred bank open

Though the bank is not willing to lend you at the moment because of the risk involved, it does not want to lose you as a client. After improving your credit score and building multiple streams of revenue, the bank will easily resume lending you compared to a new client. However, it is imperative to ensure that the account is active to demonstrate you can sustain loan repayments.

Work hard to improve personal credit score

Your credit score is perhaps the biggest indicator of an individual’s creditworthiness. By improving the credit score, all banks will be ready to approve the loan during the next application. Here are some useful tips for raising your credit score;

  • Check and correct any error in the personal credit report by three credit reference agencies.
  • Ensure to meet your credit obligations especially regular bills on time.
  • Consider debt consolidation loan using home equity to enjoy lower interest rates and make repayment easy
  • Consider borrowing from your own account and building a good repayment history

Craft a workable debt management strategy

Every lending institution wants to see a workable plan that borrowers are using to move on to the next step. As you continue repaying the logbook loan, having a long-term financial plan is very important. Depending on the amount of revenue streaming into your account it will be easy to convince banks you are a reliable borrower and do not present any risk. For example, you can include multiple sources of revenue such as a home baking business, salary, and stock market trading to help clear any loan faster.

Adopt serious austerity measures by changing personal lifestyle

As you apply for the logbook loan, it is important to ponder what exactly resulted in the current precarious situation. Whether it was an emergency or piling bills, the experience should help you emerge wiser. One way of preventing recurrence of such situations is serious austerity measures. For example, you could consider buying a smaller car with better fuel economy or even ride to work every day. Then, some of the freed money can be used to repay the loans and build an emergency fund.

Consider using collateral when borrowing from the bank

Even if a bank is not willing to lend you cash because of poor credit score, good collateral will easily make them reconsider the application. In many cases, banks will consider your loan application for borrowers using home equity or their vehicles. The collateral is a demonstration that you take the loan very serious and can go to great length to prevent the asset from getting auctioned to recover unpaid debts. However, you must be extra careful when attaching your home equity to the loan because it can be sold by the lender if you default.

While taking a logbook loan is considered the lowest moment that a person can sink to because of the risks such as high APR, it is paramount to start rebuilding trust from the current financial institutions. By looking at the situation from a long-term perspective, it will be easy to make banks and other financial institutions your partner because their credit is flexible and attracts lower interest rates.