When you decide to borrow a loan, the lender should be a close friend. If the lender is a conventional bank, the services offered will go beyond the loan. In many cases, the services could be the missing link to help your business march to the next level. However, when the credit score is low, the available loan options are very few. One of these options is the logbook loan.
A logbook loan is a form of credit secured against your car. It is considered the option of last resort because of the multiple risks involved. If you take a logbook loan, it is very important to prepare appropriately. More importantly, you should make the lender your closest friend to enjoy the following benefits.
Easier negotiation on APR and loan agreement
Many people hold the view that logbook companies have fixed interest rates. This is a misconception. Unlike banks that have the same interest rates all the branches across the UK, the logbook lenders operate differently. If you take the right approach, the lender will adjust the rates for you. When you make the lender a close friend, it will be easy to negotiate for better APR.
The best way to have the rates adjusted downwards is presenting an offer. If the lender has an APR of 210%, go ahead and present what you consider ideal for you. For example, ask the lender to give you a loan with an interest rate of 150% APR. The lender will have to talk to you for a better rate such as 170%. The drop will be significant when calculated over a number of years.
Assistance with improving personal credit score
The main reason that has landed you at the logbook loan dealer is poor credit score. After getting turned down by banks, it is only the logbook loan companies that are willing to assist you. However, making the lender your friend will make him go an extra mile in assisting with credit score improvement.
- The lender will help you understand what credit score is and identify where things went wrong in your situation.
- As a friend, the lender will assist you to craft a debt management plan. This will not just help in clearing the logbook loan, but all the other debts too.
Avoiding falling into further financial woes
Now that you have borrowed from a logbook company, it is important to appreciate that issues can arise and force you to default. For example, if you lose the only source of income, the chances are that the lender will recover and sell the car. But it does not have to be that way if you are a close friend to the lender.
- The lender will help you identify areas of austerity and directing the cash to clear the loan.
- Good lenders will assist you to automate monthly payment to avoid unnecessary penalties.
- If repayment becomes completely impossible, the lender will assist you to weigh the options of last resort such as selling the car.
Support in increasing personal streams of revenue
The moment you settle for a loan, everything narrows down to budgeting. While you might have thought that all the sources of revenue are exhausted, a good lender will demonstrate how to raise extra cash while keeping the expenses minimum. Here are some great examples.
- Redesigning your home to make some rental units.
- Using the garage to run a side business such as baking cakes
- Doing part-time job in your area of profession to raise additional cash
- Working online in your area of specialization to raise more cash
When you identify a good lender, it pays to consider him a personal friend. As you put a lot of effort in clearing the loan, a friendly lender will give helpful advice on creating new streams of revenue and marching to financial freedom.