What Makes a Logbook Loan More appropriate Than a Payday Loan?

What Makes a Logbook Loan More appropriate Than a Payday Loan?

With the recent economic turmoil in the world, it’s little surprise that many people are struggling to find ways to get cash-in-hand quickly. For this, short-term loans have often fitted the bill perfectly.

But as many edges have also been hit by the recession, they are increasingly cautious of lending to consumers. As a consequence individuals are forced to seek different method for a cash loan.

A market that cropped up to meet this need was the payday loan scheme. However, those that examine the terms and conditions of such loans carefully may in fact notice that a logbook loan is more appropriate to their needs, and comes with lower risks than a payday loan.

What is a Logbook Loan?

A logbook loan is a loan granted against your means’s V5 document or “Logbook”. It is an easy method of loan as they do not check credit history. It is generally approved within a day and requires very less paperwork. Though it has a requirement, ie. the means should be finance free and should not be more than 12 -13 years old. nevertheless, it is considered as a better different to Payday Loans because of low interest rates and flexible repayment options.

Here’s a few reasons that a logbook loan may be the more appropriate option:

1. Interest rates are considerably reduced.

Although payday loans may seem a quick-fix for cash in hand loan, many individuals fail to consider the high interest rates that such loans come with.

Payday loans can sometimes come with APRs topping 4,000%, leaving borrowers paying back a significantly larger sum than they originally borrowed. It does little to help your cash flow stabilize, which is what loans are intended to do! If you don’t repay it quickly, you may find yourself facing a potentially weakening debt.

Logbook loans however, are secured against the worth of the borrower’s car, which generally method that the APRs are far less, meaning it’s a more manageable debt and easier to pay back.

2. possible for larger sums in loans

While payday loans may keep up an allurement in that they require virtually no collateral, leaving it as a no-strings attached kind loan, if you already own a means you have a high-value asset in your possession. This asset can be used to help acquire a logbook loan, which then in turn gives you access to a greater possible sum to loan.

Although it depends on the value of your means, logbook lenders may offer loans ranging from £200 up to £25,000. It doesn’t matter if you are considered to be self-employed, or if you have a less than stellar credit record. Your car is generally the second most valuable asset you would own, and you can make that asset work harder for you in securing a log book loan.

3. Loan periods are more easily managed

Payday loans are designed to be a quick-fix, that is a short-term solution. What that method, is you’ll have to repay the loan within a comparatively short period of time. If the borrower cannot obtain the funds to repay the loan, the interest quickly builds up. This leaves borrowers at times forced to take out a second loan merely to repay the first loan!

Lenders offering logbook loans however, can set it up so that you can repay the debt over a far greater time period, anywhere from half a year up to three. In addition, borrowers can sort out a repayment plan to match their cash-flow needs, which guarantees you can pay back your debt in a timely and stress free fact.

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