That every economic boom is followed by a period of tepid or even negative growth is well-known. In the history of our economy, the latest downturn that started in 2008 and still playing itself out, has been particularly bad. The period has been marked by elevated levels of joblessness and decrease in incomes. Credit has been hard to come by and this has had a snowballing effect on jobs and incomes. At the retail level, while interest rates have remained stagnant, mainstream lenders do not entertain those with a less than stellar credit history.
For individuals hit hard by the economic downturn, this has been a double whammy. On the one hand, they either have lost their jobs or have a job that doesn’t help them make both ends meet, on the other, they find it hard to meet their urgent money needs. This situation is apt to drive them to despair. It is in this situation that alternate lending instruments like log book loans and pay day loans have gained popularity. While alternate lenders are accused of charging extortionate rates of interest, it may also be acknowledged that the majority of borrowers stick to their repayment schedule and end up a happy lot. Problems do arise when borrowers default or delay their repayment.
As most of you are aware, log book loans are pretty easy to get if you own a car that is less than ten years old and is free of any encumbrance. When you apply online through a site like ours, the loan can hit your bank account in as little as 24 hours. Your credit history is not a consideration when the loan is processed. Instead, the factors considered are your car’s market value and your financial profile. The size of the loan that is issued to you is based on what is considered an affordable repayment amount on the basis of your profile.
There are a few things that borrowers should be aware of in the context of a log book loan. First and foremost, the rate of interest is high though not as high as payday loans. Why are the rates so high, you may wonder? It is because, log book lenders operate in a high risk market comprising customers with poor credit history. Their operational costs are much higher than mainstream lenders. The rate of interest reflects this high risk.
Secondly, when you sign up for a log book loan, you are leaving your car’s V5 document for the lender to keep as a security. At the time of signing up, you are given a repayment schedule which you are advised to check and ensure that suits you. You will be better served to opt for a schedule that allows you to repay the loan in the shortest possible time, given your financial situation. This way your interest outgo will be minimum.
If you are disciplined in your repayment, there is no reason why a log book loan should cause you issues. In fact, a great majority of borrowers stick to their repayment schedule and see log book loans as a quick and dependable source of money at times of urgent need.
