The Real Cost of Taking out a Logbook Loan
Posted on Nov 23 2012 at 01:01:34 AM in Finance & Investment
The logbook loans derive their name from the fact that they are loans offered to you by securing the ownership of your logbook. This simply means that you surrender the ownership of your logbook to the lenders, and this technically means they now own your car though you are allowed to drive it. When you hand in your logbook, the loan officer will inspect your car to determine the value upon which the loan will be centered. This does not necessarily mean the market value. They do not give you loan more than 50% of the market value of your car. When you have been granted this loan, a repayment plan is then drawn through which you will repay the loan or have your car repossessed and auctioned.
The complete cost of getting loan against car will mean a total calculation of what you have to spend to get the loan, the loan itself, and then what you repay in total. When all these are considered, you can then see that the logbook loans would have cost you more than you ever gain from them. Let’s for instance calculate one of the rampant circumstances you will get with the loan against car. If you take out a loan of $1,500 from the lenders, and you pay back $53. 60 for a complete period of 78 weeks under an APR of 437.4% which is normally the level at which they keep it, you will eventually end up paying a total amount of $4,180.80. Check whether this is not outrageous considering you just borrowed $1,500.
Another thing that contributes to loan against car being very expensive involves the fact that whenever you slip up in paying this loan even for a very little period of time, the late fees and other charges associated with this will pile up to the extent that you will pay through your nose. Another one is the fact that when you cannot repay the loan and your car is auctioned and there is a difference in the price between the loan amount and the money recovered from selling your car, and you don’t even have the money to settle this difference, other properties of yours like your house or another car if you have any will also suffer the cost. Any of these can also be auctioned to get the complete amount. This loan is very instant, and without any credit check, but the cost can as well make a mountain that you can only climb if you are really prepared.
Another cost of this is that in most cases, your car is repossessed if you miss even a single or double payment period. If you are paying weekly interest and miss just one week or two, you might face the wrath of repossession. And in most cases, you are even required to pay the cost of wheel clamping if such thing is ever used on your car. All these come together to make the cost of this loan so unbearable. But if the urgency to use this is much, you have to search for the ones with the best rates. You can get logbook loans with interest rates that are less by up to 100%.
Will Scarlet is a professional financial advisor and provides expert advises on log book loans and currently working with Logbookloanshelpline.co.uk . For further detail of loan against car and bad credit loans just visit at our website.