If you visit any financial expert in the UK, the first piece of advice is to stay away from logbook loans. Despite the fact that these loans are very expensive and risky, many people are forced to take them after credit denial by conventional banks. In many cases, people are at the point or no return and have to pick what is available rather than what is ideal.
However, no matter what landed you at the logbook loan; the truth is that a bigger problem is just around the corner. Why is it the case? This is because most people already have several outstanding loans that have pulled the credit score. Therefore, a logbook is simply another loan that will make the road extra tough.
The main question at this point is; is there a way out for those who take logbook loans? In this post, we bring you five expert tips for handling logbook loans.
- Create a strategy of clearing your debts
The first most important thing is appreciating the entire debt problem you are in. For example, you have to appreciate the reason for selecting the logbook loan was poor credit score. Therefore, your strategy has to be inclusive so that you do not just clear the logbook loan, but also get out of debt completely. You might want to consult a financial consultant when crafting a strategy to factor all other debts and regular expenses.
- Start working on improving credit score
Though you have acquired a logbook loan, it is important to appreciate that need for cash has not ended. Therefore, what will happen if you need cash immediately after clearing the current logbook loan? It is important to safeguard your future need for credit by improving your credit score. You can achieve this through the following steps;
- Regularly check and correct your credit score from various credit reference bureaus
- Start clearing the current debts
- Consider borrowing from your own account and repaying on time
- Establish areas of expenditure that you can reduce to raise cash for clearing loans
When a financial expert tells you to take a comprehensive look at personal lifestyle to establish areas of austerity, it dawns that there are so many ways of reducing expenditure. In particular, you can consider the following simple methods of cutting costs and directing the resources to clear the debt.
- Consider riding to and from work for a few days every week
- Take public transport to work as opposed to the personal car
- Carry personal lunch as opposed to eating in a hotel
- Subscribe to online movies as opposed to visiting the theatre every week
All the saved cash should be redirected to helping clear the logbook loan and other debts. Note that a high level of discipline is required to make these austerity measures bear the results you anticipate.
- Come up with additional streams of revenue
While you might be so good at budgeting, resources will always be limited. New expenses will keep emerging. To handle all the loans more comfortably, get out of debt, and enjoy financial freedom, it is important to create new streams of revenue. Even if you are very busy, there will always be a method of generating additional cash. Note that this need not be as much as your main salary, but will go a long way to helping you clear the logbook loan and other debts.
Many people consider working online for few hours taking surveys, running a blog, or writing content in their areas of specialization. For example, a web designer can start a blog to help people with websites to draw a lot of traffic. Then, interested corporates will be required to pay a fee to place ads on the page.
You could also start a small business for your spouse. Think of starting an art collection centre, baking place, or even a book centre to generate some revenue. All the additional revenue should be redirected to helping clear the logbook loan and other credits.
While you might have sought a logbook loan as the option of last resort, it is possible to make it a stepping stone to financial freedom. Use the outlined tips to repay the loan, stay out of trouble, and clear even other debts.