Making Your Logbook Loan A Stepping Stone to Financial Freedom

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

How Michelle sank into financial problems

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

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

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

Getting out of financial trouble and walking to financial freedom

  • Seeking and implementing recommendation of a financial expert

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

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

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

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

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

  • Improving personal credit score

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

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

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

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 loan 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.

 

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.

 

 

Excellent tips to help you repay your loan in time

Acquiring a logbook could be really easy. Paying it on the other hand is something entirely different. Sometimes, it’s better not to take a loan at all than failing to pay one. Well, you already know the consequence of not meeting the stipulated repayment deadline. You will definitely lose your car and probably face more money challenges. That is why you need to do everything in your power to pay back your loan in time. This easier said than done though. Thankfully, you are in the right place. Below are some great tips to help you in repaying your loan before the due date.

Make use of your bonuses

In order to meet your repayment deadline, you are going to have to put your income gains into good use. Instead of buying that new gadget, why don’t you redirect your extra money towards paying your loan? In case you do a contract and happen to get a generous tip, don’t just spend it all at once. At least dedicate a part of it to your loan. Do this for every bonus you get from now on as you continue with your monthly instalments. Although it might seem difficult to let go of that extra hard earned cash sometimes, doing this will help shorten your repayment period. Try it and see for yourself!

Refinance your loan

Another great way of repaying your logbook loan is by refinancing it. There is no better way of clearing outstanding debt than by using this method. Refinancing involves taking another loan in order to pay for the first loan. The new loan now becomes what you need to pay off and is usually subject to a lower interest rate. Therefore, you eventually end up completing your logbook loan instalments and begin concentrating on another loan.

Despite all that, you need to be really careful with this method. It is usually better to refinance during the early or middle stages of the repayment period so that you can pay an overall cheaper amount in the long run. So, remember to research on other available loans even after you have taken a logbook loan.

Lower your living standards

Apart from refinancing your loan, you should also consider lowering your living standards in order to repay your loan in time. For instance, you could move to a more affordable house, especially if the loan is really taking a toll on your finances. Just think about how much money you can save on the rent. All of that can be directed to clearing your loan and free you from debt.

Moreover, you could also try to adjust your lifestyle to a lower income. Get rid of any subscriptions that you know you’ll survive without, especially online. Additionally, consider public means of transport in order to save on fuel. By adjusting your lifestyle to a lower budget, you should be able to save enough money to pay your loan in time.

Redistribute your payment

Have you ever thought of distributing your loan payment into more instalments? Note that, the more instalments you have, the less the amount you will have to pay for each. Therefore, try to break down your payment as much as possible. You could decide to make weekly payments for example. By doing so, you will have the responsibility of hassling for only a quarter of the monthly instalment you had previously chosen to pay earlier on. It doesn’t have to be weekly only. It could also be bi-weekly or tri-weekly. Just choose what you are most comfortable with. Redistribute your payment in such a way that you can pay your instalments with minimum stress.

 

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.

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!