Costs of Logbook Loans
Logbook loans are loans secured against a vehicle that is legally owned by the borrower. The vehicle can be retained by the borrower until the loan tenure, and the ownership can be gained back upon successful repayment of the loan amount along with the interest.
How much does it cost to get a logbook loan?
Interest charges are around 400% Annual Percentage Rate [APR]. They can even be higher. The interest is charged on the borrowed amount on per week basis. For instance, if you borrow £1,500 and repay £55 for a period of 78 weeks, then you would be repaying back totally £4,250 entirely. This implies that you would be paying back £2,750 in order to borrow a loan amount of £1,500.
However, no credit checks are carried out and people with poor credit history can procure a logbook loan quickly. These loans are however at high-risk as long as the lender is concerned and hence prove out to be expensive. If the loan is repaid early, then the borrower is not charged with any penalty and can save oneself from paying a huge sum to the lender.
Despite the high cost that needs to be returned, one cannot deny the fact that logbook loans can be easily repaid back. These come in as a handy alternative when one has a bad credit rating. This can be considered as a last resort instead of totally ignoring it when you don’t really have a good credit rating. The upside is that they are quite easy to avail. No credit checks are run on the applicant by the lenders. Logbook loans are a better choice in comparison to unsecured loans.
Understanding the cost of the logbook loan
Logbook loans are immensely popular and in demand in the lending industry. This isn’t a surprise considering that this financial product is easy to avail and doesn’t require a credit check. It is vital to understand the cost of the loan while availing it for the first time. Few terminologies involving the logbook loans have been described in the following section of the article.
The most important factor to look into while considering the cost of a logbook loan is the Annual Percentage Rate [APR]. The best way to gauge the actual cost of the loan is by understanding the term APR. All the annual fees and charges are considered in it.
The APR for logbook loans is usually 400%. It can be higher or lower depending on the lender. As it represents the actual cost, the borrowers can look for lenders who offer a low APR. It is, however, important not to forget looking into the reliability of the lenders when it comes to logbook loans. A reliable lender will always come up with ways to work out the agreement with the borrower in case the latter is going through a rough financial phase in life. It is vital not to forget about the flexibility in payment options to be considered while looking for a logbook loan. At the end of the day, quick finance and convenience must be given priority when in need.