Logbook loans – Are these a safe financial option?

Time and time again the first question to pass from a potential client’s mouth is “Are logbook loans safe?”

Well, are any loan products safe? And what do you mean by safe? There are many products out there that have a form of collateral to protect the financial institution giving the loan. Think of a tenant guarantor loan. Here someone signs surety the loanee. So in other words, should they default the guarantor is eligible to pay for that loan instalment. In the case of a logbook loan, the collateral is your vehicle.

That said, there are companies out there that will take advantage of naïve customers, especially those who do not know enough about the product and are desperate. They will try to exploit these people in order to make money.

Unfortunately, logbook loans do have a bad name although this is something that is getting better as more people realize that they need to go to reputable institutions when getting themselves a loan product of this type.

A decade or so ago, many logbook loans had terrible terms. Often these were simply not financially viable for the people taking them out and they ended up losing their precious vehicles. This can still happen today if you are not careful or if you go to some backyard financial dealer. And we use the word financial very loosely in this regard. ‘Loan shark’ is certainly a term that is far more acceptable.

A word of warning… these people still exist and it is incredibly important that you take note of all the terms and conditions of any loan contract you might be willing to sign. Pay particular attention to the fine print. Often, restrictive clauses are hidden here. Once you sign, you really have no recourse to fall back on.

What about us?

Well, we believe that without customers we are nothing really. That is why we go out of our way to offer logbook loan products that adhere to a strict set of rules, policies, and guidelines administered by various loan authorities. We want to help those people that have money problems but more specifically, those that have a poor credit rating. High street banks certainly won’t help and from time to time you will need loan products.

What do you need to check when taking out a logbook loan?

When you decide to take a loan product from a lender that might not be a high street bank, there are a number of questions that you should ask yourself each time. In fact, should you choose to use one of our loan products, we would expect you to have asked these questions as well.

These are just a few of the things that you should take into consideration when wanting to take out a logbook loan. Rest assured, these products are indeed safe when taken from a reputable lender. So do your homework before signing a contract, you certainly won’t be sorry that you did.