Are Logbook Loans A Good Idea?
Finding a suitable loan product when you need cash fast but have a bad credit rating is no easy matter, especially in todays economic climate. Most banks no longer want to deal with anyone but the very best prospects and if your credit rating leaves something to be desired you are going to have to have some sort of collateral to get what you need.
Its for this reason that a number of so called “fast cash” products have become very popular on the market, allowing consumers to get out of difficult situations without asking too many questions about your ability to repay. Of course, as with anything that sounds too good to be true, there are several downsides to using all of these products which can see you in an even worse state than you started.
One product in particular that can be seen to be causing more than its fair share of problems are logbook loans. In fact these are so dangerous that it now looks like there is going to be a government ban on logbook loans in the UK.
If you haven’t heard of this credit product before then I’ll tell you a little about them to get you up to speed. Basically this is a fast cash loan in which you put up your car as collateral for the money you borrow so that the lender has some sort of guarantee that they will get their money back. This might not sound so bad but these lenders are renowned for their tough tactics when it comes to getting their cash back.
Not only is your vehicle at risk but taking out a logbook loan usually involves very high interest rates of up to 400%, which means you are going to be paying back much more money than you borrow, leading in many cases to an even worse financial situation for the consumer.
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