If you are thinking about using a logbook loan to remedy your unfortunate financial situation then I’m here to try and convince you that this might not be the best idea. In fact the reason that only people with bad credit ratings and desperate situations use this product is because just about every other loan on the market is a safer and cheaper than taking out one of these. Logbook loans are used because they are a last resort and for that reason the lenders have the an ability to treat the consumer as pretty much as badly as they want. They don’t have a reputation to uphold and they use your desperation to charge you as much as they can.
Logbook loans UK are renowned for having huge interest rates, although they are not as bad as payday loans which are another product that is made for people with no other place to turn to. With high interest rates you end up paying far more money back than you borrow in the first place, so if you are in trouble before you take it out you will no doubt be in an even worse state when the ordeal is over.
The other problem is that this is a secured loan so you have to put down some of your property as collateral which acts as a sort of insurance policy for the lender. They know that if you don’t come up with the cash to meet your repayments they can take possession of your belongings and sell them to get their money back. With this product the property you need is a car. The lender will generally give you a loan to about half the value of your vehicle and as quick to turn up at your front door when you fall behind to take it off you and auction it to get their money back.
So if you manage to pay back your logbook loan on time you end up repaying much more than you borrow, and if you don’t then you lose your car. Doesn’t sound like much of a deal to me.