What to be Careful About While Taking a Logbook Loan

Posted by SharonEvans on February 22nd, 2013

 If you need cash urgently but your credit score doesn’t let you take a personal loan from a bank, there are other alternatives that can get you quick cash. You can go for a UK secured loan or a logbook loan where the process is quite brisk and you get the cash with minimal paperwork and in no time. However, the terms and conditions matter a lot when you are accepting logbook or secured loans. This is because unlike in case of normal unsecured loans that you get from lending institutions, you pledge something on line for logbook loans and secured loans. Therefore, you risk losing something valuable and that too for a cost much lower than its market value.

In case of a logbook loan, the interest rates could be much higher than 200%. This means you could end up paying back an amount that is many times more than the actual debt that you had taken. A few missed payments can make the debt unmanageable. In case of a UK secured loan or logbook loans, the lenders have the right, as per the terms of the debt, to recover their money from the asset you have pledged. In some cases, even questionable ways of recovering the money are put into practice by some lending institutions. That is why you have to be absolutely sure of what you are getting into, instead of focusing solely on how quickly you can get the cash.

When you are taking a logbook loan, you sign an agreement with the lender that effectively makes the lender the owner of the car, even though you get to drive it for as long as you are making the payments on time. Usually, the debt repayment structure is drawn at the beginning, so that you can plan your repayment amounts over a period of 12 to 72 months. It could be more or less as well, depending upon the lender. However, you have to be absolutely careful about the repercussions of missing even a single payment. The risk entails not only losing your vehicle but also other possessions to cover the debt, in case the value of the vehicle isn’t sufficient to make up for the existing debt. The UK secured loan can be approved by placing any kind of property like house, jewellery or even furniture, as a guarantee, as long as the debt amount is smaller in value compared to the pledged assets.

When you are taking a logbook loan, you are virtually empowering the lender to repossess and if needed, sell your vehicle to recover the debt. Given the abnormally high interest rates charged for these loans, one has to be absolutely sure the debt can be managed before signing the agreement. These loans can be obtained swiftly for emergency purposes. But one must make it a priority to repay the debt at the earliest possible date. The same holds true for any other form of UK secured loan too.

Are you looking for a good UK secured loan? Please visit our website to avail the logbook loan that is tailor made for you.