Guide to Logbook Loan Borrowing

With all the controversies surrounding logbook loans, applying for one may look complicated. Some say the loans are unreasonably priced with ultra high APRs. Others appreciate it for the convenience it offers. Borrowing money in this day and age, after all, is not easy especially with banks and major lenders becoming more risk averse.
To help make the borrowing process easier for you, below are some tips you might find useful:

1. Set the Amount and Term
Before you start scouting lenders and deals, one of the first things every responsible borrower does is to determine the amount of the loan. You need to establish how much you need and stick with just that when applying. When it comes to the loan term, it should depend on the amount how much you can afford for the monthly repayments.
If that seems confusing, you can stick with this simple rule - borrow the smallest amount within the shortest term possible. If you do that, you'll avoid paying a high interest rate and you get out of debt fast.

2. Choose the Lender Wisely
If you already know how much you need, the next step is to scout for the right lender which is no easy task seeing that there are numerous choices in the market. To make it simpler, you can compare lenders side by side according to what they charge for their annual percentage rate (APR).
Typically, you should opt for the lender with the lowest APR as it means cheaper and more affordable. But before deciding based solely on APR, you should also take into account hidden fees and other charges if there are any.
Does the concept of APR still confuse you? To help you grasp it better, Investopedia has a good article you can read and a video to complement the lesson.

3. Know the Requirements
Another way to avoid the hassles when getting a logbook loan is to know the requirements beforehand. Once you have chosen a lender, make sure to verify the requirements you need to prepare. The most important of them, of course, is your V5 or logbook document so you should have that ready.
It also helps if you can verify details such as age of the vehicle, model and brand requirements. Some lenders only accept specific models and age of the vehicle in general should be less than 8 years old.

4. Shop Around for Great Deals
Even if you've already inquired about requirements, it's always best to keep shopping around for other deals. Most lenders, in order to entice borrowers, offer great incentives and discounts so you need to keep an eye on that if you want the most competitive logbook loan available.

While at it, you should also request for quotes. This service is often for free so might as well take advantage. Or you can also use loan calculator which majority of online lenders has in their website. This way, you'll have a better idea of how much your monthly dues will be if you borrow this certain amount of money for a specific term.
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