Logbook Loans: Know the Merits and Demerits
Posted on Nov 21 2012 at 01:48:31 AM in Finance & Investment
When you are in need of loans, you simply have to consider both the negatives and positives before you decide whether to get the loan or not. You only need to go ahead if you discover that these negatives we are about to mention does not outweigh the negatives. Thefirst of this is that your car is immediately at risk whenever you sign this deal with the lender. You might see the future being bright, without remembering that uncertainties have a way of attacking men. So, whenever you borrow with your car, you will be ready to forfeit your car becausefailure to repay the loan for just a week or two might see your car repossessed and auctioned. The bill of sale you sign with them gives them the right to possess the car once you default, without going through anycourt.
The fact that this loan is secured with your car, and therefore gives you the leverage to be able to borrow a higher amount so far as it is commensurate with the value of your car, might tempt you to borrow more than you need. Thiswill in turn increase what you have to pay, and this implies more debts for you. When you take out a loan against car, you have the leverage of paying through a longer period of time. In most cases, this may even stretch to up to 80 weeks. The truth is that the interest is distributed and calculated according to the length of time the loan lasts. So the simple truth is that when you pay through a longer period of time, you pay higher interest than in situations of shorter repayment period like that of the payday loans. You might also experience some complexities understanding the calculation of the representative APR, and this is not good for you because you are supposed to understand what you pay.
Apart from taking out loans that are far more than what you need, there are also some people with bad credits who get fascinated by the simplicity and ease involved in obtaining the logbook loans. This group will even go ahead to apply for and get these loans even when they do not need them. They use the loan for trivial and inconsequential things that will eventually give them the level of debts they cannot repay. In most cases,this is due to the fact that they never had any mapped out expenditure and repayment plans as theynever needed this in the first instance.
Another bad side is that if you have a car that is still in finance, you will get ready to be rejected by a lot of loan givers. This is due to the factthat they will always like to work with a car that is free and of specific value that will cover the amount borrowed. The loan is also given only to peoplewhose name is on the car, and not their spouses or family members even if theseare the people that bought the car. Then in the actual sense, lenders do not give you up to the actual value of your car. They normally leave some valueout, to cover the administrative and legal costs, incase your car is repossessed.
This article is written by Will Scarlet who is an expert financial advisor of Logbookloanshelpline.co.uk. He wrote several articles before on loan against car, instant loan and many more.