One outstanding characteristic of logbook loans is that they attract very high-interest rates. Because many people turn to logbook loans after conventional banks decline applications for credit, they are willing to take whatever is available. In other cases, applicants are simply unaware and simply take the credit without worrying about APR. The gross effect is some companies hiking their APR even to rates more than 400%. This should not be the case. In this post, we bring you the ultimate guide to lowering your logbook loan APR.
Be patient when seeking a logbook loan
Just like other enterprises, the APR offered by different dealers differ with a huge margin. Note that the dealers are also in business and, therefore, tie their APR to several conditions. For example, even if your credit score cannot let you secure a loan from a bank, you might have hit the point that a logbook loan dealer wants to give lower rates. Therefore, you need to carefully follow the preferred logbook loan dealer and meet the set conditions. Take time to review various logbook companies to select the one offering the best deal for you.
Use what you have to reduce the amount to borrow and repayment period
Well, it is not rocket science friends; the more you borrow, the higher the interest you will pay. Yes, the banks have denied you the credit, but there are avenues you can raise some money to keep what you will borrow low. Take some moment to think what you are not using right away and convert it to cash. Think of expensive jewellery, electronics, antique collections, and artwork lying around the house. One borrower in Manchester, Nathaniel Edgar narrates how his drive to look for a logbook loan opened a new road to enter into real estate.
While Edgar’s credit score sank to the lowest point after his wife fell sick, he thought it could take years to recover. A visit to a financial consultant opened his view of loans. The expert made him realize that he could fix another door to one of the main house rooms, renovate the garage, and join them to form a rentable unit. He managed to cut the amount borrowed with 50%, lowered the APR with more than 30%, and created a new stream of income. You only need to look around, be critical and creative to get new streams of income.
Negotiate the APR smartly
As indicated earlier, logbook companies are in business and competing for clients like you. Because they want to make money, netting you to sign for the loan is their goal. Therefore, do not shy from asking for a review of the APR and loan policy. Here are the key tricks for emboldening your negotiations.
- Identify other companies with lower APR and use them to lever your negotiation. Many companies will see that you are slipping from their hands and offer a better deal.
- Tell the logbook company management that you will allow them to deduct the monthly pay directly from your account every month. This will give them the assurance of your commitment and capability to repay the loan without being problematic.
Reach the companies directly as opposed to going through dealers
Every time that a third party is added to any chain of production, the interest rates hike to generate additional profits. Therefore, find out the actual logbook companies and deal with them as opposed to working with their dealers. Some dealers may hike the APR with up to 10% to try and raise additional profits. Besides, they are more rigid and cannot agree to bring down APR bellow the point they have agreed with the respective company
While you might be under pressure to get the logbook loan as fast as possible, it is important to resist being rush. By taking some time to review available lenders and negotiate for better rates, you are sure of getting better APR rates. Remember that you can also bring the APR rates lower by repaying the loan faster.