Solutions to Bad Credit With a Fast Logbook Loan

Falling Into Bad Credit

Bad credit sneaks up on anyone – from the hopelessly addicted shopper to the hardest working corporate slave. It may be self-inflicted or an unexpected family emergency that has suddenly depleted your funds and you’re left buried in credit card debt.

Bad credit also has the unfortunate tendency to spiral out of control. Everyday expenses don’t really stop and so adds up to what you can’t already pay out in full. At the end of the day you’re left with a financial problem that takes working through layers to get out of.

Fixing bad credit is sadly not as easy as getting into it. With the current state of the economy, traditional financial institutions need to be very selective when screening loan applicants. Credit history plays one of the biggest factors in approving a loan. With bad credit history, you can only hope for a miracle to get out of your financial straits.

If you’re not willing to put up a substantial asset such as your home as collateral, banks may give you no solutions.

An Alternative Financial Solution

One of few options available for those with bad credit is the Logbook Loan.

A log book loan allows you to borrow money against your vehicle, given that you’re the vehicle’s owner and have the right to do so. This kind of loan does not require a stellar credit history – in fact, logbook loan companies aren’t known to make credit checks at all.

The advantage to a log book loan is that it’s a very quick and easy way to get cash, if your situation calls for it. As far as requirements go, you only need to be of legal age and have the vehicle’s V5C Registration Certificate (the logbook) at hand.

Once you’ve applied for a loan, the loan provider will assess the value of your vehicle. Many loan companies will only accept vehicles that are 10-years-old at the maximum, and in good working condition. The assessed amount of the granted loan will normally fall at 50% of the vehicle’s market value.

What Are the Risks?

The biggest risk of a logbook loan is that you stand to lose your car in case you fail to make payments. If you already struggle financially and find it hard to maintain a steady stream of income, it may not be a suitable solution.

Furthermore, log book loans command a very high annual percentage rate. Going as high as 400%, logbook loans are meant to be paid as quickly as possible, or you run the increasing risk of getting left with more debt than you began with.

Loan providers typically operate outside of court and their terms are found in the contracts you sign with them. These give the company the right to seize your vehicle if a certain number of payments have not been made.

Before applying for a log book loan, take the time to research on different lenders to make sure that you get the fairest contract terms and the best interest rates you can work with.