A logbook loan can be a really great option when you are searching for money to help you through tough financial times. The quick processing and little requirements make them an excellent alternative for acquiring money. After all, you only need to own a car. However, are they always the right loan for you? Here are a few things about logbook loans everybody needs to know.

Are great for emergencies only

Logbook loans are a favourable option in case you need money fast. However, you need to be aware that they are not that good for your pocket as they seem to be. Actually, logbook loans have really high APR’s compared to bank loans. Although you might get your cash quickly, these high interest rates are something you need to avoid if you can.

Logbook loans should be among your last options when it comes to seeking finances. Therefore, if you think you can get by the next couple of weeks without taking a loan, continue staying strong. You will be much better off in the long run than when you take a logbook loan.

You could actually lose your car

It’s no joke. You will have to forfeit your car upon failure of repaying the loan. Did you know that the logbook loan lender doesn’t require any court order so as to possess your car? Well at least that’s what the English law says. Before you apply for that logbook loan, you need to ask yourself this question: “Am I ready to lose my car?” Think deeply about it, because there is a high possibility of losing your vehicle for good. However, if your answer to that question is yes, then proceed with the application. After all, no risk no reward.

Why are they too easy to acquire

You seriously need to ask yourself why logbook loans are so simple to acquire. Well, that’s because they come at a cost; your money. By the time you end up paying your lender, you might have ended up paying almost twice the principal amount. This is due to the unbelievable interest rate charges and you seriously do not want this. That is why it is advisable to keep away from logbook loans if you can.

Your vehicle’s age is a factor

When applying for a logbook loan, you should know that your vehicle’s age is always a factor, especially if you are using a used car as collateral. Old cars usually have less value than more recent ones. Therefore, don’t expect to get that much if you own a really old car.

Note that lenders will always carry out a valuation of your vehicle and tell you the amount you qualify for. You won’t be charged for this valuation. So, you can try your luck and see how much you are eligible to. Unfortunately, you will only obtain of up to a certain percentage of the value of your car. Put simply, avoid logbook loans if you have a really old car.

You don’t really have the leverage

Taking a logbook loan by using your vehicle as collateral could make you feel like you are making a good financial decision by leveraging your vehicle. However, the truth really is that you do not have more control over the loan than the lender does. Think about it. Almost everything lies in his or her favour. If you fail to repay, they get to have your vehicle. On the other hand, if you do repay the loan, they can get almost double the amount they lent you thanks to their high APR’s.