Are you thinking about logbook loans? When the economy is at its worst, short term financing is often at its best. However, ignore all of the claims of loans being “predatory”. A loan is just a product — it cannot be good or bad. It is all about the meaning that we assign to it — and that means that the field is wide open for interpretation. You will want to make sure that you are forever thinking about the unique benefits that any financial product has for your situation.
Even though critics say that these short term loans are predatory, the reality is that there are just times where you need financing. What if you need to make repairs on your home but you know your credit isn’t the best? You can turn to loans for that! Sure, there are social lending sites, but the bottom line is that they can take forever to get approved. After you’re approved for posting on the site, you still have to wait for the loan to be funded. When time is against you, this is just not a luxury that you actually have. A lot of people who have never really been in any financial trouble want to weigh in and punish you before you’ve had a chance to defend yourself. They’ve never been in a real situation where they have to have the money and they need everything to work in their favor. That’s not a situation that anyone “wants” to be in. if you’ve ever really needed money and you knew you couldn’t get it, you will find that it’s better to make sure that you can always think about getting it in the fastest amount of time possible.
We’ll say it a different way — speed matters. It’s all about speed when the clock is ticking. Do you really want to find that you cannot get things done because everything and anything is in your way? Not at all. You want to go into your situation with the calm that comes from knowing the money is going to be there for you.
And that’s what brings us to logbook loans. They are a long term loan in the sense that you can hold the loan for a little bit (12-18 months) without having to pay it all back at once. This also means that you can borrow a lot more money than a standard payday loan.
If you’re really hard up for cash and you need quick approval, this is definitely the way to go.
A logbook loan is also referred to as a V5 loan, and it works based on a bill of sale rather than a hire purchase agreement.
There’s a few things that you need to keep in mind.
First and foremost, until you have repaid the loan, the logbook loan company is the legal owner of your vehicle. However, there’s nothing to fear — you can still keep driving the vehicle back and forth to work and anywhere else you need to go. The company isn’t going to restrict your driving at all.
The bill of sale agreement is registered with the High Court in London, which means that it’s open to public inspection. So this isn’t a good option if you really want to be as discreet as possible, but it can be a good option when you really need cash quickly.
When you think about it from this perspective, the logbook loan differs from other types of loans because it is a secured loan. Your vehicle is literally the security. This also gives you incentive to make those payments every week or every month, depending on when you get paid.
Usually the company will work with you as long as you’re being honest with them. If you end up defaulting on the payment of the loan, or something else, then they can begin the process of repossessing the vehicle. Once the vehicle is sold, you aren’t necessarily “free” of the loan — you may have to pay a shortfall between the amount you owe and the final selling price of the vehicle, minus the recovery fees.
Keeping all of this in mind is really, really, really important. The last thing that you want to say is that you weren’t prepared. These loans do require a bit of research so that you really do know everything that’s going on.
Good luck, and make sure that you really do take the time to work your way through the fine print. Logbook loans are really friendly in the sense that they will truly work with you to get the loan, but you have to remember to do your part as well.