Are you looking for a quick fix to your cash problems? Are you in search of the ultimate lending option?
For people with bad credit, there are not a lot of options, really. Many banks and other reputable lenders prefer borrowers with impeccable credit credentials because lending to people with poor or no credit can be risky for a well-established institution.
This is why a lot of the people continuously search for alternative lending options. And many, who do, end up stumbling across logbook loans – a secured lending option in which you keep your car as collateral to borrow quick cash even if you have bad or no credit history.
The logbook dilemma
When it comes to getting logbook loans, coming to a final judgment about their suitability isn’t that easy. On the one hand, logbook loans are becoming more and more popular as a lending option. On the other hand, financial experts warn people about high interest rates and the potential risks that come with a logbook loan. This puts many of us in a tricky situation.
Therefore, let us analyse some of the pros and cons of logbook lending. By doing an in-depth analysis of some of these positives and negatives, we can assess whether or not logbook loans are your perfect lending options.
Bad credit doesn’t matter: One of the most attractive features about logbook loans is the no credit check policy a lot of the lenders follow. This is because, unlike many of the other bad credit lending options, logbook loans are a relatively secure investment for the lenders. In case you don’t pay back, they can sell your vehicle to recover their money. So, you can borrow money even if no one else is willing to lend you some because of your credit score.
Failure to repay may cost you your vehicle: The whole point of a logbook loan is that investors prefer it because it’s secure. And it’s secure because your car is the collateral. The lender will not sell your vehicle right away though. They’ll usually wait for a few months and if you fail to pay up after several notices, only then will they resort to the extreme option. But that’s not necessarily a good thing because the interest for all those months combined with the original amount would mean you’ll have to pay back much more than you received.
It’s a quick and easy borrowing option: One of the reasons many people prefer logbook loans is that you don’t have to wait much for the approval. With the increasing popularity of logbook loans, the number of lenders is increasing every day. And with so much competition, each lender aims to offer a faster approval process and lesser delays.
Unbelievably high interest rates: All good things come at a cost. And the cost for taking out a logbook loan is huge. Interest rates are high even compared to some of the other alternative lending options for people with bad credit. The average Annual Percentage Rate (APR) for a logbook loan is somewhere around 400 percent. We’ll let you take a moment to consider that before you make your choice.