Is a logbook loan the right credit product for you?
Logbook loans have certainly become a very good way to get credit, especially for those with a poor credit rating that will find no recourse at normal financial institutions. That said however, there are many other loan types out there that are becoming available to those members of the UK public that are suffering from a bad credit rating.
So how do you know that a logbook loan is indeed the right credit product for you? Well, there are a number of questions you can ask yourself.
Why do you need a loan?
The first thing to determine is why you need a loan? If you need a few hundred pounds to fix your geyser, then maybe another type of loan is a better example, such as a payday loan. These are good for once off fixes that you need to sort out. If you need more money however, say for an expensive medical procedure or repairs to your house, then a logbook loan will be a far better option as you are able to secure more money due to the value of your vehicle.
Just how bad is my credit score?
Now your credit score might be poor but have you exhausted all your options in terms of getting a regular loan? If you cannot secure a loan with a bank, then a logbook loan is an excellent option for you.
Are other borrowing options open to you?
Make sure you have explored every option before you decide on any credit product. The same is true for a logbook loan. If you have a well-kept vehicle however and need quite a large sum of money, there is no better option than a logbook loan, especially if you have a low credit rating.
How long do you want to pay back a loan over?
Along with deciding on how much you want to lend, it is prudent to have an idea of how long you would like to be paying the loan off for. Luckily, logbook loans are fairly flexible credit products, both in terms of the amounts they can afford you as well as the terms over which they are paid. Always try to pay the loan off as quickly as possible. This just saves on interest in the long run.
Is the loan company reputable?
Again, we cannot stress this enough. Is the company offering a logbook loan or any other credit products, reputable? There are many fly-by-night operations looking to make money off you. Please be careful!