Find yourself in need of quick access to cash but not sure if there is a lender out there who will be willing to comply? For many of us with a bad credit rating it can be a real trial to try and find a high street bank who will lend so we need to hunt down other options for a loan.

If you do a quick search on the Internet for Fast Cash options you will find there are actually a few options a available Online which promise to help you out of a financial black hole. Cash advances and quick LogBook Loans are two of the products most popular at the moment with UK citizens. A cash advance offers a very short term loan for up to around £750 which has to be paid back to the lender on the day when your next paycheck gets paid into your bank account.

Log Book Loans on the other hand are a longer term solution to your cash problems with you paying back a agreed amount each week for up to a year and a half. This product also has the advantage of being available for a much larger sum than a cash advance, making them helpful when you have bigger problems. With loans of up to £50,000 on tap you will rarely be complaining that the loan isn’t big enough for your needs.

How Do Log Book Loans Work?

In essence a logbook loan is a secured loan where you get cash by using your car as security. You will have to own your own car and paid off all or most of any finance you had on it. The amount you can borrow will be dependent on the value of your car and will generally be quite a bit lower than the value of your vehicle. Obviously the reason your car is used as collateral for a loan is that if you default for whatever reason the lender can repossess your car and auction it off to make up for any money that you might still owe them.

Its easy to see why people are attracted to log book loans in the UK. They offer large amounts of money which you get your hands on in under 24 hours through a nice and easy application process. With the bad economy these days they’re becoming even more attractive as many individuals struggle to control their finances and look for more ways to make ends meet.

So if you’re a car owner and you have CCJ’s, defaults, a below average credit score or no credit rating then instant log book loans are definitely an option but are they the best option? You might think that because this site is called Log Book Loans UK that I am going to give you the hard sell and try to convince you that this bad credit loans product is the greatest thing since sliced bread but that’s not the case. I actually want to also point out the negative aspects of this credit product and convince you that you need to think very carefully before using them.

Stick around and you might learn something about why there are better options out there, what they are, and how you can take advantage of them.

If you have bad credit and find yourself in a financial emergency, you might be tempted to approach a logbook loans company and find out what they can do to help you in your current crisis. Sadly the fact of the matter is that you will just end up getting yourself in worse trouble. However, the day may come when you decide that the situation you’re in is dire enough that it’s worth the risk of future disaster, or you may feel certain of your ability to repay the loan that you decide to accept the risk of losing your car and go ahead and take out the loan.

Before you do so, here are the top three reasons why the government is attempting to ban these loans, and why you should consider very carefully before getting one yourself.

A 400% interest rate should be enough to send anyone running for the hills. No matter how desperate you are for money right now, the fact that you’re going to have to pay back whatever you’re borrowing today times four is ridiculous. The only reason you’re going to have to do that is because you have bad credit and no other choices. Don’t be a victim. Find another way.

High charges, extra charges, hidden fees. Logbook loan companies have so many extra charges and ridiculously high charges attached to the loans that are in addition to their high interest rates, that you will also have to pay. For example, they can charge you £50 just to write the loan for you, and £50 to witness your signature on it, and £25 to take your payment every week.

The final reason to not enter into a logbook loan is the fact that you have to put your vehicle up for collateral. For most people a form of transportation is an essential part of life. It’s simply impossible to get to work, the doctor, the grocery store and all the other places we need to go to in our daily lives without a vehicle. Some of us even have to have transportation in order to do our jobs. If you own your vehicle, don’t risk your entire livelihood by putting it up as collateral for a logbook loan.

A log book loan is a loan in which the consumer signs over their vehicles logbook to a lending agency in exchange for cash. The car itself stays with the owner but if they fail to repay their debts on time the lender will take possession of the car and sell it to cover the remaining money owed.

Its certainly true that these secured high interest loans are best avoided at all costs. They may have a use for people who are desperate for cash and need to get access to credit immediately and have nowhere else to turn. The problem is that although they might provide a little short term relief the end result is often that the borrower ends up in ever deeper trouble than when they started.

If you rely on your car as your sole method of transport the using it as collateral for a loan is about the worst thing you can do at the best of times. Logbook loans companies though won’t give you a loan which even nearly matches the value of your car so if you end up unable to pay your debts you are going to lose much more than the money lent i the first place.

One top of the risk of losing your car there is also the terrible problem of the 400% interest rates incurred. Even if you never fall behind in your payments and clear your debts on time every week, you are still going to take a financial pounding by using the log book loan. You will often find that by the time you have paid off your debts you have given the lenders nearly three times the initial loan. If you were in financial trouble before you got started, God help you by the time your bad credit loan is paid off.

These secured loans obviously are going to appeal to people who need cash in a hurry and as such are not going to think long and hard about the consequences of their actions. Its for this reason that it might actually be a good thing if they are made illegal, even though I believe in the right of the consumer to choose.

If the bill goes through it will mean that under the Consumer Credit Act a loans for logbook lender will no longer be able to seize a car without a court order. My guess is that these lenders will find a new way to do business that allows them to still get away with charging their exorbitant rates but this seems to be a step in the right direction.

It looks as if the need for a new law has arisen because of the increase in the number of people using them in the last couple of years, probably due to the fact that the credit crunch is effecting an ever larger number of us. Estimates show that over £30 million worth of this single type of loan have been taking out over the last year. And with over 1,000 complaints to the Office of Fair Trading over 4 years it looks like to government has finally decided that it is time to act.

The chief executive of the citizens advice bureau David Harker is quoted as saying: “CAB advisers have seen cases where borrowers have been subject to unfair or misleading sales practices, with lenders failing to ensure borrowers clearly understand the terms of the agreement before they sign up to it, and failing to check they can afford the repayments.

“Missed payments can lead to aggressive debt collection tactics, and problems with bills of sale debts do not end with repossession. The CAB has seen cases where lenders pursue shortfalls after sale aggressively, including putting people’s homes at risk through the use of charging orders – a second chance at securing a previously secured debt.”

According to the newspapers who are reporting this story the logbook loan is a remnant of laws which were introduced in the times of Charles Dickens. It certainly seems as if they have had their day and if society is to progress we need to protect citizens from dangerous loans for people with bad credit that can lead them into even more trouble.

If you have already fallen victim to the logbook loan and are finding it difficult to repay your debts to one of these lenders then you are going to have to get some professional help to find the best way to get out of debt. In the UK your best bet is to contact the Citizen’s Advice Bureau for some expert, impartial advice. With luck you should be able to work towards a solution with doing any more damage to your finances or your credit rating.

What we do need is impartial information which reveals all the facts so that we can all make informed decisions about the action we take in any given circumstance. And if someone wants to use logbook loans as part of their financial strategy when they are having cash flow problems then that should be their right in a free country.

Why Do People Use Car Log Book Loans?

There are many varied reasons why you would think about using these personal loans for people with bad credit but it all boils down to one thing and that is that they have less money than they want or desire at a particular moment. Like all loan products, the log book loan remedies a shortfall in difference between the amount of money you have and the amount you would like. As you are probably aware the log book loan is no ordinary credit, so what is it that separates it from a loan you would get from the high street bank and why are so many people interested in using it?

1. This adverse credit loan product is just about the quickest way available to get your hands on cash. If you own a car you can take your vehicle to their office to have it checked over and you can get the finance you need the very same day.

2. They are accessible to a wide range of people. Normally if you go to the bank and try to take out a loan they will do a credit check to find out what your financial history is like. If yours shows tat you have had problems with credit before there is a greatly reduced chance that you will get the cash you need. Log book lenders are unconcerned about your credit rating and won’t even check it when you apply. All they are interested in is if you have the means to pay off the loan and the fact that you have a vehicle to put down as collateral.

3. You can get access to large sums of cash. Other fast cash loans such as payday advances only allow you to get around £750 but a log book loan is usually only restricted by the value of your car. Most lenders will be willing to lend up to £25000 depending on how much they consider your vehicle to be worth.

4. Varying payback periods. You can decide how long you want to borrow for with loans sometimes being repaid after only one month and sometimes over a two year period.

5. Many local branches. Some people think that a log book loan is going to be hard to organise due to the fact that you have to take your automobile to the lender’s office but with so many branches spread all over the UK you shouldn’t have to go far to get things lined up.

So you see, the car log book loan does have some valuable plus points that aren’t available from any other type of lender. At the end of the day you have to think seriously before using any form of credit to decide whether its the right course of action for your own circumstances.

If you every feel you are being forced into using a loan because you have gotten into such a dire situation that you feel you have no other choice then it may be time to get professional financial help. In the UK your first port of call should be the Citizen’s Advice Bureau where you will find great impartial advice to help you make the changes you need to get yourself back on track.

It all started when I ran out of money due to being laid off at work, I knew I had another job which was starting in a few weeks with a friend so I figured that I’d have no troubles in getting things all squared up. I wasn’t thinking clearly due to having other personal issues going on at the time or I would have looked in the consequences of my actions more thoroughly.

Its easy to skim over the details of a loan agreement when you aren’t totally focused on what you are doing, and these lender make it sound like they hold the keys to your financial freedom. They like to tell you the positives but skim over what could happen if you fall behind on your log book loan payments.

Anyway, this all happened a couple of years ago. I’ve lost my job, but I start working for a friend in a few weeks and I need to get my hands on some cash to pay 2 months rent and living expenses until the money starts coming in again. So I went to see the log book lender in my car and was relieved when they said I could have the money the same day. At the time I didn’t realise how easy it is to get handed a log book loan and didn’t question the fact that they were barely giving me half the market value of my vehicle. For my £1500 car I got £800 and they took my log book as a guarantee against the possibility that I might not pay back.

My only fear when taking out the loan was that I wouldn’t get the job that had been organised and I wouldn’t have the funds to make the repayments, but that never materialised and I paid the debt off on time. My original £800 loan had cost a total of £1500 when I cleared the debt due to the high interest rates but at this point the lender decided that I had missed two payments even though I had proof that this wasn’t true. With no amount of phone calls could I convince them that they had their facts wrong and to this day I don’t know if they truly believed their own story.

Regardless, when I was at work one day the log book loans company set round the bailiffs to repossess my vehicle without giving me any prior warning. After going to the Citizen’s Advice Bureau its has been confirmed that the lender acted illegally but that I’ll have to take them to court if I want to court which would cost a fortune. With my shortage of funds this just isn’t an option so I’m basically stuck in a no-win situation.

The thing is that my story didn’t turn out as bad as many others who have used car title loans for the simple fact that my car wasn’t worth too much money in the first place. Thanks to the fact that I have a steady job I got back on my feet without too much problem but that doesn’t make it much easier to handle.

I hope my story convinces you to stay clear of log book loans no matter how desperately you think you need the cash, its for your own financial good.

This first major problem with logbook loans is something which the lenders will inform you of on their very own websites. Its something that should immediately remove all thoughts of using this product from your head, but we tend to ignore the obvious when we are in desperation mode. It is of course the ridiculous interest rates that are applied to these loans.

Visit the site of any logbook loans lender and you will probably see a little table which will highlight the interest rates and the total amount you can expect to repay over the course. The website will fail to point out the importance of the figures or explain that you would be mad to take out such a loan unless you literally have no other choice. The lenders are to busy telling you about the fact that these loans are so easy to get that you can have your money tomorrow and the information about how much its going to cost you is hidden away at the bottom of the page.

The typical APR on one of these loans is a whopping 437% which means that if you take out a £1500 and repay over a period of 78 weeks you will be handing them back a total of nearly £4200. Do the maths and you’ll see this means your relatively small loan have just cost you £2700 or nearly three times what you originally borrowed. I don’t know about you but to me this doesn’t seem like too much of a deal and there’s no chance of someone mistaking this for a low cost secured loans product.

Unfortunately the high interest rates are only the start of the problems with Logbook Loans. The premise of this secured loan is that you put your car down as security for the cash but many of us fail to consider the implications of this before taking the plunge. Its simple really, fail to met the repayments and your car will be taken from you, auctioned and the proceeds will go to the lender. To make matters worse, the log book loans lenders won’t give you a loan for anything like the value of the car so if this happens to you, you’re really taking a big financial hit.

Also, these people are not like those down at your local bank. They won’t try and understand when you can’t make your payments because you’ve just lost your job or you’ve had some unexpected emergency financial situation. There will be no allowances made and you won’t be able to reduce your weekly repayments to suit. Neither will you be able to repayment holidays like you might get from your mortgage lender when you are in trouble. Miss just one payment and most lenders will send round the debt collectors to take your car from you forcibly.

There are other problems and horror stories associated with Logbook Loans but I will leave them for another time. The bottom line is, avoid this product if at all possible and if you have money troubles get a professional to make you up a financial plan that you can stick to.