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.

 

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.

 

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.