Stuck With A Logbook Loan? Here Are Three Things You Can Do

A logbookloan is an easy way of getting fast credit against your vehicle. The loans are usually taken by people with poor credit score and cannot secure loans from other conventional institutions such as banks. However, a lot of people in the UK get stuck with the loans when they find it difficult to keep up with the agreed repayment schedule. What do you do when it gets difficult to continue repaying the logbook loan?

Things you must be aware when taking a logbook loan

When you settle for a logbook loan, it is prudent to be cognizant of the numerous risks that come with it.

  • The APR (annual percentage rate) is very high. In many instances, this percentage could be as high as 400%.
  • When you take the loan, the car ownership is transferred to the lender. You are required to submit the car logbook or V5C vehicle registration certificate to the lender.
  • The lender is allowed by law to come and take away the vehicle immediately if you default. However, most of them will not tow it away until you default for several months.

Taking into consideration that your credit score was already poor because of outstanding loans, the chances of finding it difficult and defaulting is very high. With the car being the most valuable asset after the house for many people, seeing it getting towed away and auctioned is painful. However, do not let that happen by using these three solutions.

  • Talk to the lender about the problem

Logbook loan companies are out there on a business and, therefore, will go to great lengths to make a profit. It is because of this that they charge very high interest rates on their services. Their interest is not starting lengthy battles with clients, but getting smooth payment to make a profit. If you find it difficult, to meet the agreed schedule, the first stop should be at the lender’s office.

Demonstrate to the lender why you can no longer continue paying the agreed amount and what can be managed on a monthly basis. For example, if you just had a medical problem and you only expect disruption for a few months before springing back to the agreed repayment level; most lenders will reason and agree. However, you must be prepared to incur additional penalties.

  • Talk to a financial expert about the problem

When people turn to logbook loans, they rarely think of reaching to the point of getting the vehicle towed away. However, the reality dawns on them when it becomes extremely difficult to service the high-interest loan on a monthly basis. But you can still address the problem by seeking assistance from a financial expert.

Top financial experts have handled similar or even worse situations. So your problem will not be a mountain. One solution recommended to many people is weighing the risks that come with all the loans and focusing on the one that poses bigger loss. For example, if you are servicing credit card loans, insurance loans, and other credits not attached to any collateral; they do not pose a risk of taking away the only family car. Therefore, you will be advised to put more focus on the logbook loan because the car is at a great risk.

  • Organize to sell the car and notify the lender

In extreme cases, you might need to reconsider the unfolding problem and work on tackling it head on. Well, take a situation like this. You have a car worth £5000 and have taken a loan of £1500. Now that you have gotten stuck, a good solution might be organizing to sell the car for £5000 and clearing the remaining amount in full. The balance of about £ 3000 could be used to acquire a cheaper and reliable family car. Remember that in such a case, you must involve the lender because he already has the logbook (owns the vehicle temporarily).

Four Most Important Things You Must Know Before Taking a Logbook Loan

A logbook loan is one of the easiest lines of credit. They are processed fast, and your credit score is not a factor like in other financial institutions. However, borrowers have been cautioned to be extra careful when taking logbook loans because of the numerous risks that come with them. In this post, we outline the four most important things that you must know prior to taking a logbook loan.

The difference between APN (Annual Percentage Interest) and other bank rates

Logbook loans attract high-interest rates compared to conventional credit from banks. While common banks offer their credit at interest rates of as low as 5%, most logbook loans have as high as 400% APN. Take an example, of Mobile Money Logbook Company that has an APR of 99.9%. Therefore, a client who borrows £1000 for a period of 18 months will be charged £665.10. The client will, therefore, pay a total of £1665.10 by the end of the repayment period. Having a clear picture of this interest rate will help you to plan appropriately. Note that this is just one company; others might have higher interest rates.

Financial impact for non-repayment

Once you sign the agreement and the loan is released to you, it is prudent to make the monthly payment on time. Because every logbook loan lender has individual rules that govern actions for non-repayment, it is very critical to read through the respective policies. The main financial implications include the following;

  • A harsh penalty could be slapped on you. This will raise the total amount you will pay by close of the repayment period.
  • Because the loan is taken against your car, the lender could come for the vehicle and sell it to recover the money.
  • If the lender sells the car and the amount raised is not enough to clear the loan, the lender will still come after you to recover the balance. You will be sued in a court of law to help recover the balance.

Non-repayment implications on credit score

While logbook loans do not factor your credit score when you are applying, things change in case of non-repayment. Because the logbook firm is a licensed lender, he is allowed by law to provide credit, and his report to the credit reference bureau will further damage your score. Since most repayments are made through banks, they usually include info pointing your details and inability to repay the loan. It is, therefore, very critical to ensure that you make all monthly payments on time.

The flexibility of the lender

The lender you go to for a logbook loan is very important for a smooth repayment session. Many are the times you will get reports of people’s vehicles being towed and getting auctioned because they failed to remit monthly dues. When you select the lender, it is important to get it right on all the particulars of their flexibilities.

Establish whether the lender can renegotiate the deal in the case of financial difficulties: If you had agreed to remit £ 90 every month, but you are finding it difficult, the best lender should agree to renegotiate. For example, the figure can be lowered to about £80.

Find out how fast the lender moves to recover the vehicle if you fail to remit monthly dues: Because you have already surrendered the ownership of the car by taking the loan, the lender is at liberty to come for it any time after defaulting. However, you should borrow from a lender who is not hasty to take the car away. Some will look for you to find out if there are difficulties and work for ways to address the issue.

Why Shady logbook loan lenders are your worst enemy

The benefits of logbook loans notwithstanding, we can’t be blind to the fact that shady logbook loan lenders have indeed made many people lose faith in logbook loans. Initially, logbook loans were meant to be a solution to a problem, a means through which bad credit individuals got a shot at redemption. It was, in no uncertain terms, a loan product that led to a paradigm shift on how people viewed individuals with a poor credit rating. While the intention for introduction of logbook loans was noble and well meaning, shady logbook loan lenders hijacked the goodwill to make the whole process of acquiring a logbook loan a nightmare of sorts.

In recent years, there has been a wild cry among UK individuals who have been swindled in one way or another and sadly, ended up losing their cars not to mention finding themselves deeper into debt. Cases of harassment bordering on physical abuse, emotional torment, uncouth professional behaviour, and death threats in extreme cases are just but some of the unethical ways that shady logbook loan lenders use to intimidate their borrowers to meet their end part of the bargain.

Indeed, the narrations by borrowers of harrowing experiences under the hands of shady logbook loan lenders is testimony to the fact that to some extent, logbook loans have been used to exploit unsuspecting borrowers. You only need to do a simple search online to come face to face with harrowing recounts of how some borrowers have been unduly treated and victimised under a logbook loan. The murky world of logbook loans has been characterised by extreme interest rates, harassment calls and wanton car repossession without much of a prior notice.

As if that is not worse enough, unsuspecting car buyers have found themselves in the deeper end of the pool when logbook loan lenders repossess their cars even when it’s clear that they were unaware the car had a logbook loan attached to it at the time of buying. It is clear that laws governing logbook loans are as old as civilisation and therefore it is about time that there was a change in the same. The bill of sale agreement give logbook loan lenders powers to repossess a car without following any due process and this clause has been effectively abused by shady logbook loan lenders for selfish interests.

Individuals who have suffered under the hands of shady logbook loan lenders report either of the following cases:-

  • Evasive lenders when it comes to explaining terms of the loan. Shady logbook loan lenders rarely divulge all information regarding the loan hence misleading borrowers to make uninformed decisions. In other words, the terms of the loan are vague and not clearly explained.
  • Harsh treatment by lender on missing one or two payments
  • High penalty charges and fees on default
  • Extreme and harsh collection practices
  • Car repossession without giving borrower sufficient time to get their finances in order

In light of the above, it’s crystal clear that shady logbook loan lenders are simply out to enslave borrowers and exploit them to the maximum. They are like vultures waiting to pounce any minute when a borrower faces some sort of financial constraints.

There is therefore the need for a relook into the laws that govern logbook loans. There need to be consumer protection especially those that buy cars unaware that they have a logbook loan attached to it. That notwithstanding, it’s imperative to do due diligence before engaging the services of a logbook loan lender or even buying a second hand car. After all, it is always important to be safe rather than sorry!

What to Consider Before Taking out a Loan on Bad Credit

It isn’t always the best solution to a financial crisis, but in desperate times getting approved for a loan even when you have less than ideal credit is the only way out of your predicament. Here are some of the first things to consider before biting the proverbial bullet.

Think of the Repercussions

One of the more obvious consequences of borrowing money on bad credit is the potential for getting even worse credit. This is due to the fact that lenders need to protect themselves and cover the risks of granting loans to people with bad by offering high-interest loans. And if for any reason you default on your payment, then there go your hopes of eventually improving your credit scores.

But that’s not even the end of it. If you somehow come across a low-interest loan offer despite your credit, chances are, there will be plenty of hidden fees on top of your payments. The low interest fees might have just tempted you into signing up for a loan that you didn’t think was going to be so expensive to pay back.

 

 

Look Around

Borrowing options for people who have bad credit are rare, but definitely not non-existent. However, if you are looking into borrowing money on bad credit, you must be able to discern which of these options suit your needs best, as some of them can lead to more financial problems than they’re worth.

For instance, credit card companies will gladly talk to you and lend you money via a cash advance, despite your less than spectacular credit standing. Cash advances are not that difficult to get approval for, but they often come with huge fees and finance charges that can leave you in worse financial shape than before. It is similar to borrowing money to pay for a previous loan; eventually the arrangement becomes increasingly difficult to maintain and manage. Before you know it, you’re credit is ruined.

Whenever possible, and depending on how much money you’re looking to borrow, try to look for alternative borrowing options that won’t impact your credit rating. Examples of these include asking friends and family for a loan, usually with very little to no interest. Not being able to pay them back won’t affect your credit.

 

Think Long Term

If you’re desperate enough to take out a loan while your credit rating is in shambles, at least consider how paying the loan back can help raise your credit scores. Talk to reputable lenders who can accurately report your payments to the different credit bureaus, and help you formulate strategies on how to raise your credit scores. But none of that will matter if you don’t make your loan repayments on time.

Remember What You Need It For

Your situation may be dire enough for you to resort to borrowing money on bad credit, leaving you with very little room to negotiate with lenders. It’s possible that you may have just lost your job, fallen sick, or gotten into an accident. Remember what you need the loan for, then try your best to make your payments on time. Sometimes, it just takes a little bit of sacrifice in order to get you back on your feet. Good luck!

Five Must Do Things to Stay From Trouble after Getting a Logbook Loan

The number of people borrowing logbook loans and finding themselves in trouble has risen sharply in the last decade. Some often get late with payments while others have their vehicles taken away and sold to recover the loan. These are not the only problems. Many are those who take the loans but live with a lot of stress for the entire repayment period. However, you do not have to get into any of these problems when you use the following tricks.

Make sure to look for the right logbook company

The first step in staying away from trouble is selecting the logbook company carefully. In the last 20 years, the number of logbook loan companies has grown tremendously. You should vet every company carefully so that only the best is selected. For example, you should carefully review the companies and leave out those firms that rush to collect clients’ cars within days of default. The best way to know about a god company is talking to previous clients. They will tell you how the company related with them and even advise whether to proceed or not.

Carefully read through the terms and conditions before signing the agreement

Once you sign the agreement with the logbook loan company, it is required that you adhere to all the conditions. Many people find themselves in trouble because they never read the rules and are caught by surprise. You must, therefore, carefully read through the instructions to know the limits. For example, if the agreement requires you to pay on the tenth of every month, you can reorganize finances to meet the targets.

Do not stop at reading the agreement, go ahead and ask for a review. Note that logbook companies are in business and look forward to having a happy customer base. Therefore, when you ask for some minor changes, they will not be opposed. For example, if one of the rules indicates that you must meet the monthly payment on the first day of every month; there is a likelihood of defaulting in the case of salary delays. Ask the lender to relocate the payment date to any day after 20th of every month. With such changes, you are sure of meeting the deadline even if the salary is late with a week.

Review all your debts and start paying with the logbook loan

In many cases, people go for logbook loans because they have been turned away by conventional banks. To get out of the debt burden, it is important to start clearing the loans commencing with those that have high-interest rates such as logbook loans and credit card loans. By putting the logbook loan on top of the repayment list, it will be unlikely to default. Note that we do not imply that you should default, but, in the repaying the logbook loan will not be affected in case of issues with your revenue flow.

Consider opening new lines of income

If you entirely rely on salary to pay the logbook loan, try to look for another source of income to boost your revenue. For example, you can opt to work online for a few hours after work for additional revenue to ensure that all the expenses are met. You can also try a hand in small home business that does not require a lot of capital. You can also take your wife to a short baking course, buy the right baking machinery, open a website, and start supplying cakes to clients.

Stay in touch with the logbook company

Many lending institutions want always to know that you are available for clarifications and repayment. Your logbook loan company also wants to feel part of you. In fact, they want your positive story to build on their repute. Therefore, keep talking to the company and notify it well in advance if you feel that the payment will be late with a few days.

Making sure you get the best logbook loan possible

So you may be thinking about taking out a logbook loan against the value of your vehicle. It is important that you use the money for what you intended it for. It’s natural for people to get a little carried away when they have large amounts of money paid into their accounts. They often think that spending a little bit here and there won’t hurt but before long, your bank balance is far lower than you expected and you actually don’t have enough money to pay for what the logbook loan was intended for.

Logbook loans are the perfect way to get money in a hurry, especially to use for emergencies. Don’t waste the cash!

When you do apply for a logbook loan, there are a few simple things you can do to make sure the process itself runs smoothly and that you can get the biggest loan possible based on your car value as well as your income and expenditure each month. Let’s take a look at a few things you should consider before you apply for a logbook loan.

 

Your car is the key

The most important factor in any logbook loan amount paid out to you is the value of your car. Yes, your income and expenditure does play a part but the value of your vehicle plays the biggest part when a loan amount is determined. For this reason, it is important to make sure your vehicle is in good shape.

When you apply for a logbook loan, you will be asked for the vehicles MOT certificate. Make sure this is up to date as if it is not, it could severely affect the amount you are offered loan wise. An up to date MOT certificate means the vehicle is probably in daily use and a good runner. More importantly, it has recently passed a number of stringent roadworthy tests as demanded by the Ministry of Transport. One that is a year or two old already gives the lender warning signs that something may be wrong with the vehicle, hence lower loan offers.

Service and repairs are important

Even if you have a slightly older car, it should always be serviced and repaired often and at a reputable mechanic. If you are unsure of the service intervals on a vehicle, simply contact the vehicle manufacturer, walk into a local showroom or ask a mechanic. They will be able to tell you in a flash.

Servicing is not only about the internal parts either. Make sure you replace tires when need be, check and replace wipers before winter and have your air conditioner re-gassed when you need to. This all helps to keep your car in the best condition possible which will raise the amount you can qualify for with a logbook loan.

Don’t forget your car papers

All logbook loan providers will require a number of documents from you when you apply for the loan. One of the most important of these is the logbook or V5 document from your car. This will remain in the possession of the lender for the duration of the loan because they effectively own the car for that period, or until you pay the loan off. You will also need to provide bank statements, proof of payment, proof of address and your identity document when you apply.

With a little pre-preparation, you can ensure that your application for your logbook loan not only runs smoothly but that thanks to the condition of your vehicle, you get the best loan possible.

Important factors you should know about logbook loans

Logbook loans are fast becoming the loan option of choice for those of us who suffer from a bad credit rating but still own a car. Unfortunately, in today’s economic climate many people are falling deeper and deeper into debt. This means they often default on their debt which in turn drops their credit rating significantly.

And if you are in that situation, if you need a credit product of some form, be it a loan or perhaps even a mobile phone on a contract basis, you simply will not be approved. But there is hope for those suffering from bad credit and one of those solutions is a logbook loan.

In this blog, we will be looking at a few important things you should know about logbook loans so you can know what to expect when you apply for one for the first time. Having the knowledge beforehand takes the stress out of your application and makes things so much simpler. Let’s take a closer look.

How does approval for a logbook loan work

When you apply for a logbook loan you will need to provide a number of documents as part of your application. This has been discussed in greater detail on this site so we won’t go into it too much here. The great thing about these loans is that approval is quick and simple. Once you have applied (usually online), handed over the necessary documents and had your car assessed for its overall condition, you will know whether you have been granted a loan in as little as two hours.

Approval is done quickly as there are no credit checks necessary. The loan provider just needs to do some calculations as to the loan amount, repayment amount and a few other details based on the value of your vehicle as well as your monthly income.


 

 

How much can be borrowed?

This often differs from loan provider to loan provider but in general, the amount that can be borrowed is from 500 pounds to 50 000 pounds. Remember this is totally at the discretion of the loan provider and is based on the value of your car as well as your income and the amount of money you are able to pay back each month. The lender has your best interests at heart and it is important that you do not overcommit yourself, otherwise, if you miss payments, you may lose your vehicle.

Must the applicant be employed?

Yes! You must have a monthly income otherwise how will you be able to pay back the loan. It doesn’t matter that it is not a permanent job (for instance, you may be a waiter) but the fact that you earn money is crucial.

Repayment periods

This is something that you will discuss with the lender. Bear in mind the longer the terms, the less you will pay each month but the more interest you will have to pay. Choose a term that works for you. Also be sure to check if there are any prepayment penalties. Some lenders do charge if you pay your loan back before the agreed term amount.

 
 

Repossession

Make sure you know exactly how repossession works should you default on your loan. Some providers will take the car after just one missed payment. We believe that the borrower should be given every chance of making up for any missed payment before a car is repossessed to cover our costs.

So there you have it, a few important points to be aware of when taking out your first logbook loan.

 

Why logbook loans are a necessary evil

No doubt, the internet is laden with arguments for and against logbook loans. Proponents of logbook loans see it as a wonder product, a means through which they have access to credit irrespective of their poor credit rating. On the other hand, opponents of logbook loans term it risky and a form of extortion going by the high interest rates associated with. While there is some merit from both the proponents and opponents of logbook loans, one thing that we can all agree on is the fact that logbook loans are a necessary evil.

Let me try to paint a picture for you. We all know that credit checks are a standard procedure when a person seeks to apply for any kind of credit. Now take a moment to imagine a situation whereby you urgently require credit for whatever reason but cannot be approved by any high street bank or financial lender because of the state of your credit history. Sucks, right? Unfortunately, this is an all too familiar experience to the majority of UK citizens struggling with bad credit rating.

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While in the past majority of UK individuals with a poor credit rating resigned themselves to fate and hoped for the best, the introduction of logbook loans changed the narrative for the better. In other words, logbook loans gave those with a poor credit history a new lease of life. Perhaps, you are wondering what a logbook loan is. Well, from its name, this is a type of credit facility that is secured against a person’s car. In short, if you do not own a car, you cannot be considered for a logbook loan.

Of course, it is easy to think that you can set up any car as collateral and be considered for a logbook loan. This is not usually the case. There are indeed exceptions. For one, logbook loan lenders insist that the car you wish to avail as security should be legally registered in your own name. In other words, you cannot use your spouse’s car, your parent’s car or a colleague’s car as security for a logbook loan. You must be the legal owner and the said car should not have any type of financial attachment to it not to mention that it must be in good condition.

That said, the requirements for applying for a logbook loan are pretty simple. You must be a United Kingdom citizen, own a car registered in your own name and be a person of sound mind above the age of 18 years. If you meet the aforementioned, you need not worry about the state of your credit history as the car acts as collateral. Should you be unable to meet the end part of your bargain, the lender can always dispose off your car and recoup their money.

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In light of that, why are logbook loans a necessary evil? Well a lot of people are repulsed from logbook loans because of the fact that they are an expensive way of availing credit. To some extent they are right considering that the average APR for logbook loans is 400%. However, think about it. If you have bad credit and cannot avail any credit because of your poor credit history, logbook loans are your best bet. Consequently, logbook loans accord you an opportunity to rebuild your credit history because the only way you can do that is by diligently servicing your loan without default. Of course, this will gradually improve your credit score status. If you have no credit history to your name and face problems availing credit because high street banks have no way of telling how responsible you are with credit, look no further than logbook loans!

Types of Bad Credit Loans

For most people, when you are in need of a loan, you will go to your bank and apply for one. If your credit score isn’t great though, you will most likely be denied the loan. You don’t have time to wait for your credit score to improve, you need the money soon. If this has happened to you, and you are looking for another place to get a loan, one that will provide you with one even though your credit score isn’t great, here are a few options for you.

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  1. Logbook Loan – With a logbook loan, you essentially use your vehicle as collateral. You borrow money against your car, using it to secure the loan. They are normally fast, giving out the money in less than a day, and you don’t have to worry about your credit rating. Because you are using something to secure the loan, the lenders don’t need to worry about what your credit score is. As long as you have an eligible vehicle, and can show that you can repay the loan on time, you should have no problem getting a logbook loan. Best of all, you get to continue driving your car while the loan is out, so your daily life is not impacted.
  2. Payday Loans – Payday loans are ones you need to watch out for. They are designed to be short term loans that you pay back when you receive your next pay check. Because they are over such a short period of time, are unsecured loans, and are being given out to people with poor credit ratings, the interest rates can be very high. Many people have a hard time paying these loans back, and some even need to take out another loan just to pay off the first one. If you want to get a payday loan, be sure to budget for it ahead of time so that when the time comes to repay, you will be able to afford it.
  3. Guarantor Loan – If you can’t use your credit score to get a loan, you can use someone else’s in what is known as a guarantor loan. With this type of loan, someone close to you (a family member usually) will “guarantee” the loan by using their credit score and signing up for it. You still receive the money and are responsible for all the payments, but if you fail to meet your repayment obligations, the responsibility will fall on the guarantor. Think long and hard about who you ask to be your guarantor, because it is a big responsibility. Also ensure that you will be able to pay the loan back on time, as you don’t want to damage your relationship with that person.
  4. Doorstep Loan – Lastly, there are Doorstep Loans. These loans are similar to Payday loans, but usually have slightly better interest rates and have better customer service. With a doorstep loan, you sign up online, then the money is delivered to your door. Someone from the lender then comes back to pick up the payments when they are due. These agents also have financial training, so they can discuss any problems you are having and give you advice. These loans are great if you want a personal touch with your lending experience.

Car Buying Guide When You Have Bad Credit

Bad credit doesn’t necessarily mean that you can’t buy a car anymore. You may need to go through some hoops before you get approved for a loan. It is going to be difficult but not as difficult as most people think. If you follow the steps below, you’re not only on your way to getting a new car but you also avoid bad credit scams along the way.

Step 1: Plan Ahead

Whether you’re buying a new or a used car, planning your financing options ahead is imperative. Because you have a less than perfect credit rating, you need to set realistic expectations. You should also expect to pay higher interests than someone with good credit. You are also less likely to qualify for the better loan deals because you are considered a sub-prime borrower. It’s best to know what and what not to expect before making this major purchase.

Step 2: Check Your Credit Report

When buying a car with bad credit, one of the first things you need to do is check your credit report. Ideally, you should do so a few months before you plan to buy. This window of time will allow you to take care of a few outstanding items if necessary. And while you’re at it, make sure that your credit rating doesn’t get it further for the next succeeding months until your car purchase.

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Step 3: Check in with Several Lenders

As mentioned earlier, you are expected to pay a higher interest rate than normal because of bad credit. But if you shop around, you may still get a better deal. The trick is to get pre-approved with more than one lender. You can start from your own bank or credit union. Then you can move on with dealership web sites. Some experts may claim that doing this will only further harm your credit score but don’t listen to them. Lenders know you’re looking for the best deals so go ahead and check in with several lenders.

Step 4: Come to the Dealership Prepared

When it’s time to go to the dealership or lender to discuss your options, make sure you bring along the required documents like your recent payslip, utility bill, IDs and personal references among other things. Also helpful is to bring someone along who will serve as your extra ears when reviewing the terms and conditions of the financing option.

Step 5: Stay within Range

Remember step one where you plan before making the big plunge? From the beginning, you should the price range you can afford and it’s imperative to stay within that range when shopping for a loan and your car of choice. You know exactly how much you can spare for a monthly car payment. Sticking with that budget even if you qualify for a more expensive sedan example is the wise thing to do.

Step 6: Consider Refinancing

In case you were not fully satisfied with your loan, you can always consider refinancing once a year or so is up. Remember that getting approved for a car finance loan is difficult enough for people with bad credit. The interest is higher and the terms not always the best. But you can go with the most attractive offer for now and refinance it later to get a better deal out of your loan.

Step 7: Steer Clear from Trade Ups

Trading your old car for a new one may make perfect sense. This is exactly what a number of dealerships offer their customers who are straddled with bad credit. While the offer is certainly tempting, you may want to think this option over thoroughly. When you trade for a better car, you may only end up with more debt to your next loan which isn’t always easy to keep up with.