Want To Get More From A Logbook Loan? Apply These Special Tactics

Logbook loans are very expensive and risky. People are advised to stay away from logbook loans by considering alternatives that are cheaper and less risky. However, people going for logbook loans are out of options and need the cash urgently. If logbook loan is the only option on the table, here are some tactics that you can apply for extra value.

Look beyond the APR when picking a lender

The main focus when picking a lender for logbook loans dealer is the annual percentage interest. It is advisable to ensure you only select the lender with the lowest rate. However, you need to go beyond the APR and extend to other areas. For example, you should carefully look at the repayment schedule to ensure it rhymes with your monthly wage schedule. Other things to check for include hidden penalties that can raise the total loan amount by a huge margin.

Insist on getting a bigger room of flexibility during repayment

Many people going for logbook loans think that the loans are inflexible. However, many lenders such as JustLogbookLoan are very flexible and can make adjustments during repayment. Go through the agreement carefully and insist that the lender gives you payment flexibility in case of revenue inconsistencies. For example, if the lender has indicated that every payment must be made by 10th of every month, insist on a 2-3 weeks grace period to cater for delays in salary in case of unavoidable issues. You could also ask the lender to give room for renegotiation and adjustment of the amount paid every month with a small margin.

Focus on a specific problem and borrow the least amount possible

Once people realize they can borrow some cash against their cars, there is a tendency to go for the maximum amount as opposed to what one needs. This will plunge you deep into a bigger financial problem that can last for many years. Instead, you should maintain high specificity by ensuring you only borrow what will meet a specific need. For example, if you wanted £700 to cater for an urgent bill, why borrow more? By borrowing less, the overall interest will be low and the burden easy to shed off.

Ensure that the borrowed amount is repaid within the shortest time possible

The truth about any loan is that the more you borrow, the more you will repay. In the case of a logbook credit, the period greatly determines the amount you will pay by the close of the repayment session. Therefore, it is important to commit to repay the loan within the shortest time possible. Even if you have other types of credit, you need to weigh the inherent risks involved. For example, a borrower with a school loan that does not incur interest should give extra focus to the logbook loan. Note that this does not mean clearing other less risky loans should be pushed aside. Indeed, they are equally risky and pull down the personal credit score. To handle all the loans within a short time, it is important to draw a debt recovery plan that will help to clear all debts, raise credit score, and edge you closer to financial freedom.

 

 

 

Why You Must Think About These Four Things When Taking a Logbook Loan

Logbook loans have become common forms of loans in the UK today. The number of people taking logbook loans has hit over 40,000; a very rapid growth from 3000 in 2003. Many people turn to logbook loans after getting turned down by conventional banks because of poor credit score.

Poor credit score is contributed by some factors including bad credit history, length or credit history, and the outstanding debts. If you have defaulted on the current loans, the credit score will be pulled down with a huge margin. Once you decide to go for a logbook loan, you need to think about these four things critically.

The annual percentage interest rate will be higher than bank rates

The interest rates charged by logbook loans are higher compared to what conventional banks charge. Before you sign the agreement, take a closer look at the APR. For example, if you borrow £1000, how much will you pay by the end of the clearance period? Here, the focus should be identifying the lender with lower rates and clearing the loan as fast as possible. If you can get the loan with the lowest interest rate, the higher the value for the credit.

Make sure to check on repayment terms and go for what is convenient

Many logbook loan dealers craft their agreements based on the individual business model. Because the borrower is not protected under the law, some lenders may put weekly or monthly payments. This is one hidden trick you must carefully decipher and negotiate with the lender. It is better to agree on a monthly payment if you rely on a salary. Besides, you should also leave a week or two after the date of salary maturity to cater for unforeseen inconsistencies.

The amount you need for a loan

When many people make requests for logbook loans, they have a specific need. However, this specificity easily fades away after realizing that they can get more from the lender. For example, if you were looking for £1000 to meet an urgent emergency, there is a tendency to borrow £5000 because the lender is ready to release the cash. However, this is a serious trap you must evade at all cost. The more a client borrows borrow, the higher the interest. Try as much as possible to borrow lower amounts for ease in repayment.

The ability to renegotiate with the lender

Now that you are about to borrow cash using the car, it is important to understand that financial issues can still arise and throw you off-balance the repayment process.  Therefore, you must carefully look at the logbook loan from all angles on the entire repayment spectrum. The best lender should leave some room for negotiation in the case of issues along the repayment line. Ensure that the lender includes room for negotiation in the agreement such as slight reduction in monthly payment or covering unavoidable inconsistencies.

Note that you should never look for a logbook loan in a hurry to avoid picking expensive lenders and risking falling into deeper financial trouble. Even though you are in dire need of cash, carry due diligence on the company to borrow from.

Three Items a Borrower Can Negotiate With the Logbook Loan Company

Borrowers with poor credit score face a monumental task of convincing banks and other financial institutions to approve their loan requests. Because of poor credit history, the banks view them as high-risk parties and prefer to decline their request for loans. One of the top options for people with poor credit score is a logbook loan. The lenders are only interested in the borrower’s repayment capability and do not factor the credit score. Though it might appear an easy line of credit, it comes with serious risks such as getting the car taken away, sinking deeper into financial woes, and high APR.

To keep these risks and dangers low, borrowers are encouraged to negotiate with the lenders when applying for the loans. In this post, we outline three items for negotiation to enjoy an easy repayment period and relationship with the lender.

Annual Percentage Rate (APR)

The amount you pay back after borrowing a logbook loan is determined by the annual percentage interest rate. Though many lenders have very high-interest rates that reach up to 400% APR, the borrower should not simply take what is written on the agreement. You should engage the lender and ask for a lower APR. Most of the lenders will be willing to lower the APR with a small margin. You can compare the lender’s rates with others in the market and showcase what you are willing to take. For example, if the lender has pegged his loan at 400% APR, indicate you are only willing to take it if he lowers the offer to 300% APR. Good lenders will not let you take the deal to another competitor.

Early repayment penalties

Unlike other types of loans where borrowers are encouraged to pay as fast as possible, many logbook loan dealers attach penalties for both late payments and early payments. However, why should you be penalized for early payment? This is one of the hidden penalties that many people rarely identify on the agreement sheet.

As a borrower, you should carefully read through the loan agreement to identify unnecessary penalties and insist on having them expunged. For example, if you decide to clear the loan early, the lender should only ask you to clear the total amount agreed at the beginning amount as opposed to attaching a penalty. Other penalties include late repayment with a day or two.

Loan flexibility and recollection procedures

Before signing the loan agreement from the selected logbook loan, it is important to look at the lender’s flexibility and recollection procedures closely. Here, you should negotiate to get greater flexibility and subtle recollection procedures. Insist that the lender allows you some flexibility for repayment in case you fall behind with one or two payments. For example, you can ask the logbook loan lender to leave room for renegotiation to make up for late payment without recovering the car immediately. You should also agree on the method of vehicle recovery in case you fall behind the agreed repayment schedule.

Do not simply take what is printed on the agreement, negotiate as much as possible for higher monetary value and smooth repayment period.

How Much Can You Salvage From a Car If You Cannot Continue With Repayments

Financial experts refer to logbook loans as serious financial traps that people rush to unknowingly. While this argument is often contested, the truth is that the risks and dangers that come with logbook loans are immense. The interest rates are very high and often reach up to 400% APR while the risk of getting the car recovered is equally high. Well, this is not all. If the car is sold for a figure less than the debt balance, the lender can sue you to recover the remaining amount.

While the main focus by any one borrowing a logbook loan should be establishing a prudent repayment plan, it is advisable to be prepared for the worst. If you find the financial situation is still dire, it is advisable to try and salvage the situation before everything get out of control. What can you salvage if it becomes difficult to continue servicing the logbook loan?

Engage the lender at the earliest possible instance to demonstrate commitment to clearing the loan

If you notice that the financial situation has grown from bad to worse, do not let things get out of hand. For example, if you lose employment and do not have another reliable source of income, it will be difficult to keep servicing the loan. By engaging the lender at the earliest possible instance, you are sure of avoiding penalties for late repayment or defaulting. The lender will switch to the next gear of how he will recover his cash. Note that the lender only wants to get back the total amount you could have paid and not making a profit.

Get the current value of the car and look for a buyer

If you leave the process of recovery and auction to the lender, the chances are that the car will be sold for the loan balance as opposed to its entire value. For example, it will be unwise to leave the process of disposing the car to the lender because you borrowed £2000 while the car is worth £12000. The best thing is getting the actual value of the car and look for a buyer. Remember that it is illegal to sell the car because the ownership was already transferred to the lender.

Work with the lender to inform him of the willing seller

If you have a willing buyer, talk to the lender and inform him so that he can process the ownership transfer. By understanding the buyer and having negotiated for the price, you stand to benefit in the following ways.

  • The lender will not charge you extra penalties for recovery and to auction the car
  • Because you understand the price, the lender will only take what is enough to clear the loan. The extra cash will revert to you.
  • You can avoid the stress of defaulting and falling deeper into financial trouble.

Conclusion

Every logbook loan borrower should be cognizant of the numerous risks that come with the credit. To avoid reaching the precarious situation of having the car sold to clear the loan, it is advisable to borrow what is just enough, repay as soon as possible, and start working on your credit score.