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.

 

Is Your Logbook Loan Payment Becoming a burden? Here Is What to Do to Avoiding Defaulting

Many people who take logbook loans end up defaulting because of the high-interest rates. Often, they have other loans, personal expenses, and emergencies to attend to that cannot be overlooked. If at some point you establish the burden is becoming too much, the best thing is acting promptly to avoid defaulting and sinking deeper into debt. Here are four most important things to do in such a situation.

Raise cash using alternative streams

Your logbook loan dealer is a business person, and the focus is getting regular monthly payments. Now, you should start thinking of alternative sources of revenue to augment the main salary. You should consider doing online jobs after work and direct the additional revenue to clear the loan. You can also engage family members in revenue generating activities. A good example is turning one of the main rooms in the house into a baking unit for the wife. You can also redesign a section of the house and rent it to generate some revenue.

The best area to try and generate additional revenue is the niche of specialization. This is because you have the expertise and new partners will value your input. For example, a mechanic with a local transport company who works from 8 am to 4 pm can look for a part-time job in a local garage.

Adopt the right austerity measures

Often, many people rarely realize they are overspending until a serious situation befalls them. If putting together the cash to service the monthly logbook loan is becoming a monumental task, simply take a walk through personal lifestyle and identify areas of austerity. Look at these examples;

  • Instead of driving daily to work, consider taking the bus and direct the recovered cash to clear the loan.
  • If you and your wife drive different cars to work, consider leaving one home and go to work together. This will save a lot in fuel and maintenance costs.
  • Change personal entertainment model. If you are used to visiting the expensive theatre every Friday, consider taking an annual subscription to online live streaming companies.
  • Instead of taking your meals from the most expensive restaurant, consider preparing meals at home and carrying it to work.

Visit a financial expert for professional advice

A financial expert is a professional who will help you to look at the logbook problem and entire personal debt issue from a broad perspective. However, many people rarely appreciate the benefit that a financial consultant can bring until it is too late. When you are experiencing difficulty repaying the logbook loan, a financial expert will help in the following ways.

  • Help you to draw a realistic debt repayment plan. This may involve clearing the riskiest loans such as the logbook loan first.
  • A financial expert can also help you take a financial management plan or debt consolidation and start a serious journey towards full recovery from debts.
  • Though a financial expert might charge a fee, he will assist you to envision the ultimate financial freedom. Once this becomes a lifetime goal, it will be only a matter of time before you can take charge of everything from the financial point of view.

Discuss the problem with the lender

Many are the times when borrowers think that the main objective of a logbook lender is to simply recover the car after defaulting. However, this is not the truth. The process of recovering the car is often complex and expensive. The lender has to engage third party recovery companies and auctioneer to sell the car. Even in the event that the car is sold, there is likelihood that it will not raise all the cash borrowed. This could trigger a series of lawsuits trying to follow the borrower for the remaining amount.

Because of these logistics that are very expensive, many lenders are willing to negotiate when a client is having issues. Before things get completely out of hand, talk to the lender for a complete review of the conditions. Some can even allow you a reprieve for a few months as far as they will be recovered. However, these adjustments often come with a penalty attached to them.

 

 

Five Things That Can Make a Logbook Loan Sink You Deeper Into Financial Trouble

Once you decide to go for a logbook loan, it is important to appreciate the risks that lay ahead. In many cases, it is considered the credit of last resort because most financial institutions have declined loan applications. Like financial experts point, the logbook loan should only be used with a lot of caution. In this post, we look at five key things that can make you sink deeper into financial trouble after taking a logbook loan.

Prioritizing payment of other less risky loans while giving less focus to the logbook loan

The moment the lender approves your logbook loan, it is important to appreciate that a lot of dangers lay ahead. Because you have already given away the car documents, the risk of losing it becomes real. Failing to prioritize the logbook loan when repaying other bills can only worsen your present credit situation. While other debts need to be cleared as fast as possible, those that do not come with a lot of threats can wait until the riskier logbook loan is cleared. For example, the student loan can wait for a couple of months because it does not attract any interest and no collateral is attached to it.

Taking the maximum that the lender has to offer as opposed to what you need

For many people who have been declined loans by banks, a chance to borrow looks God sent. However, this is a trap that makes most people to nosedive into the sea of trouble within no time. Even if the lender is willing to offer £30,000, but you only need £2,000, consider going for what is needed only.

A bigger logbook loan means that you will repay for a longer time with higher interest rate. Repaying a lot of cash every month for a long time is bound to cause fatigue and raise the chances of defaulting.

Hiding from the lender when meeting monthly payment becomes difficult

If you realize that the sources of revenue are having issues and meeting the monthly repayment is becoming difficult, running away will only worsen the situation. The loan will accrue a lot of interest, and the lender will start looking for the car to recover the money. Instead of running away, it is advisable to visit the lender and tell him what you are going through. Though some additional interest might be incurred, some good lenders will even allow you to readjust the repayment amount for a few months until your issues are resolved.

Failing to relook at personal spending and reworking on the budget

Financial experts in the UK and banking institutions have found that many people get into trouble with personal finance because of poor budgeting. This problem can make things worse by drawing you deeper into the turmoil of debt.

After getting a logbook loan, it is important to relook at your budget from a different angle to help release some cash. If you find it difficult to achieve this alone, make sure to seek help from a financial expert. A good budget will help you to look at personal finances from a long-term perspective.

Looking at the logbook loan in isolation

Personal finance is not about the logbook loan only. To reach financial freedom, it is important to have a bigger picture and factor the loan in the budget. If you look at the logbook loan in isolation, the chances of sliding back into the situation you are in are very high. When drawing a financial strategy, experts advise clients to look beyond the logbook loan and other credits. For example, the austerity measures you adopt should be implemented to help clear the loan, build an emergency fund, finance personal businesses, and create new lines of revenue.

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).