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.

Expert Advice on Raising Money to Clear Your Logbook Loan

Why do people go for logbook loans even though they are very risky and come with super high interest rates? Logbook loans are considered options of last resort after getting turned down by financial institutions because of poor credit score. The danger of taking of taking a logbook loan becomes evident when a borrower finds it difficult to keep paying high monthly rates.

For some people, this is the beginning point of their downfall, family breakdown, and loss of control. Immediately you default, a very high penalty is slapped on you. However, there is a lot you can do to raise additional cash for clearing the risky logbook loan. The following are expert suggestions that will help you raise extra cash, clear the logbook loan, and get out of debt completely.

Only pay the minimum for other loans and direct the extra cash to repay logbook loan

This is one of the main debt clearance strategies that experts advise clients to use with a high-risk credit. By meeting only the minimum repayment demand for most loans, the additional cash is redirected towards clearing the logbook loan because it is very perilous. You could negotiate with lenders to establish the minimum requirements or even discuss with them the best strategy for getting out of the logbook loan quagmire.

Get a bike and ride to work several days in a week

If you thought that options for raising cash are getting out, think again. The amount of fuel used on an average car in the UK is £ 2,300 per year. This is a lot of money that can be redirected towards clearing the loan. By considering riding to work several days of the week, you can redirect the saved money towards clearing the loan. Note that cycling will make you stay healthy and, therefore, could be used to cut the fitness club subscription. If cycling is not viable, consider taking public transport.

Make your own food and carry it to work as opposed to visiting a hotel

Many people end up using a lot of money at the hotel during lunch and tea breaks. However, think of the amount you can save by getting an alternative. Consider going for alternatives that are equally nutritious and reliable. For example, you can make food at home and carry it to work. Then, all the cash that was going to the hotel can be redirected to clearing the logbook loan.

Engage in a part-time job or open a side-business

In many cases, the cash people earn in the UK is hardly enough to meet all their requirements. Think of the mortgage you are paying, children school fees, loans, car insurance, food, rent, and other related costs. An additional source of income will come in handy to help you clear the logbook loan. Why not consider having a part-time job? For example, you could consider online jobs such as writing, consulting, surveys, or operate an e-commerce shop. For others, this could mean roping their spouses to engage in part-time tasks. A good example is involving your wife to run a baking shop. Take her for a short baking course, acquire baking items, remodel the garage, and open a website. Then, concentrate on selling the cakes to the local people and use the profits to clear the logbook loan.

Some people have started side tasks only for them to burgeon to fulltime employments and big companies. These options will not just help you to clear the logbook loan, but will also help to clear other debts and raise the credit score.

 

Is A Logbook Loan Worth It?

Logbook loans in the UK have become very popular not because they are easy to access, but also due to numerous controversies about them. They are quick and perhaps the easiest to access even when one’s credit score is very poor. However, financial experts go to great lengths to discourage people from them. From associated risks to high-interest rates, the reports of people who have sunk into deep trouble are always hitting the headlines of every media in the UK. Therefore, are they worth?

A logbook loan is a type of credit service where cash is advanced against your car. Once you sign the agreement, the ownership of the car is temporarily transferred to the lender. However, you must continue paying the agreed monthly payment to continue using the vehicle.

Why the logbook loan?

  • Easy and fast access to personal credit

The ever rising living costs have put people’s lives on the edge. In many cases, what they earn is never enough, and an urgent need for extra cash can throw them off balance. Now, even when getting a bank loan is part of the options on the table, the process is bureaucratic and tedious. However, a logbook loan only requires one to proof of car ownership and source of income. In some situations, the cash can be on your account within the same day. This enables you to tackle emergencies such as medical bills, rent, and others.

  • Ability to control what you borrow

If you opt to borrow from a conventional bank, the institution controls what you can get. This makes people feel passive. However, logbook loans make people become part of the process because they know the amount they can get. Some logbook companies give as much as 70% of the current car value.

  • No background checks for your credit score

For many people falling into debt and seeing the credit score plummet can happen within a very short time. However, getting out is a difficult task. In some cases, it takes years. However, as far as you have a car and can proof source of income to repay the loan, it is very easy to secure a logbook loan.

The dangers that come with logbook loans

On the flipside, getting a logbook loan is like following a dangerous route though everybody is talking about the perils on the way. The major risks include;

  • Very high-interest rates

While the conventional loans are very cheap and indeed flexible, the logbook loans are not. The APR (annual percentage interest) is very high. It often goes up to 400% by some companies.

  • Risk of further harm to your credit score

Though borrowers are rarely told, defaulting on logbook loan can easily cause the credit score to get worse. Because they are licensed lenders, their report to credit reference bureaus could further damage the score.

  • Danger of having the car reposed

In many families, the car is the second most valuable asset after a house. Besides, it is very important because it defines the family. Dad takes kids to school using it before leaving for work with wife downtown. Besides, it is used for shopping, going camping, and making the family life enjoyable. Getting a logbook loan means envisaging life without it! That is right. If you default, it will get repossessed, and life could change completely.

Final verdict

Apart from these risks, the logbook loan provides a reliable option of credit to all. The loan can only help you by getting a bigger picture before taking it. The bottom line is; do not go for it until all the other options have been exhausted. However, if you select a good lender, negotiate for better rates, and only borrow what you need; the loan is okay.

How to Get the Best Deal for Your Logbook Loan

Sometimes unexpected events just come up and leave you in need of a quick short term loan. Sometimes you are left stranded wondering where you are going to get a hold of the cash you need. This is even more difficult if you are thinking of taking a short term loan but you have a bad credit rating. Luckily there are a lot of financial institutions out there with varying terms and conditions and options. One of those options is taking a logbook loan.

While doing so, all you will be required to do is walk into one of the branches of your logbook loan provider and hand in your V5 document. Once approved the money is disbursed within a very short time and the whole process is quick and easy. You can borrow as much as you need and many times you will be able to repay the loan within a month or two.

If during such an unexpected event you do decide that the best option for you is to take a logbook loan, you should know that the amount you are eligible for is to a large extent dependent upon the value of your vehicle. It is important therefore in order to secure the best possible deal for yourself, to be able to maintain your car in the best condition. Let’s now look at how you can do this:

  • Always keep the car well serviced and repaired. A car that has a lot of broken parts and is not in top form will not attract a good price when you are trying to sell it and that goes the same way when it comes to securing a logbook loan. Always carry out regular maintenance that way when submitting your application for a logbook loan, you will be able to get the best value for your car.
  • Ensure that your car has passed its MOT. Getting your MOT certification is fairly easy provided your car is in top form. Failing may mean that your car is not road worthy which will have a drastic effect on its value. Maintaining the vehicle in top condition will help with its MOT certification and improve your chances of getting a logbook loan.
  • Brush up on your paperwork before applying for a logbook loan. By having all the necessary documentation ready, such as the V5 registration document, proof of citizenship and proof of your ability to pay back the amount mainly through bank statements and pay slips, you will play your part to help speed up the process and get your money within a relatively short time.

When taking a logbook loan, ensure that you understand fully the terms and conditions on the loan such as your repayment period, the interest you will be paying back, the periodic amounts you will be paying and the consequences for not paying back your loan on time. To take the logbook loan you will need to be the legal owner of the car and it has to be more than 500 pounds in value. Short term loans usually have high interest rates and you need to be sure you can repay the full amount.

Make sure your lender is a member of a trade body and adheres to its code of practice and conduct and keep in mind the cons of taking a logbook loan in mind at all times. These are;

  • You lack the same consumer protection as found in a hire purchase agreement
  • It’s easy to lose your car in case you can’t pay back the logbook loan. When taking the loan, you hand over ownership of the car to the lender.

That said, once you are well versed in the conditions surrounding and necessary to take a logbook loan, you can go ahead and apply for one as it may be a sure fast way to get you out of your current situation and help you sort out your short term issues.

Five Simple Ways to Improve Your Credit Score after Securing a Logbook Loan

Securing a loan from a bank with bad credit is perhaps the hardest thing that you can ever imagine. Because of poor credit score, most financial institutions will see you as a high-risk party and close your case without even checking any further. However, most logbook loan companies are not interested in your credit score as far as the car is in good condition and demonstrate the capability to repay the loan.

After securing the logbook loan, the focus must shift to building your credit score. Because most of the logbook loans are very risky and come with high-interest rates of up to 400% APR, it is crucial to avoid getting into a similar situation in future. The borrower must start working on improving the credit score immediately. This will make it possible to access credit from banks by the time you are through with the logbook loan. The following are five simple ways to improve your credit score.

Check and correct your credit score with three reference bureaus

The institutions (bureaus) responsible for calculating your credit score are third parties. They have to rely on institutions that deal directly with clients such as banks, mortgage companies, insurance firms, and others that maintain financial records. Because most of these parties are for-profit organizations, submitting your details is rarely on the top of their agendas. Banks concentrate on looking for new clients, building their brands, and raising profits.

In many instances, it is not uncommon to get your credit score misrepresented. Therefore, by getting your credit report with three bureaus, it is easy to point what is missing or misrepresented. If the details of the loan you recently cleared have not been submitted, the credit score would be calculated based on the previous data.  By correcting the details, it is possible to raise the credit score by a significant margin.

Borrow from your own account

Even if banks have declined to lend you, it is still possible to borrow from a personal account. Simply tell the management that you are on a mission to build the credit score, and they will make arrangement to lend you from a personal account. Then, commit to repaying the loan on time and it will be captured as a short loan. All the repayment details will go towards improving your credit score.

Develop a strategy for clearing debts

Now that you have added a new credit, a proper repayment strategy is crucial. It is important to create a plan to cut on costs and start clearing one loan after the other. The best method is starting with the loans that are riskier and most expensive. For example, you can start paying the minimum amounts on all other loans and commit the extra cash to clearing risky credit such as logbook loan.

Pay all your bills on time

While most people think that it is only bank loans that damage credit history, it is important to note that even common bills can pull down the score. From utility bills to credit card bills, you need to settle them on time. You should particularly follow with the credit card company to get a regular report and clear any inconsistencies.

Avoid closing credit cards as a short-term strategy

While the interest rate that accrues from the credit cards is usually very high, a decision to close the card is ill advised. By closing the card, you remove even the good history that helps to improve on your credit score. Indeed, even closing the card will still not work because the bad history will remain. The best thing is reaching the credit card company to draw a repayment plan. You can also set the spending caps to avoid overspending.