My name is Steven and this is my story about the time I decided to use logbook loans from a well known lender on the high street. I’m not really sure what possessed my to use this product in the first place, I suppose I just felt that my cash problems had got so bad and not being very financially astute I just took the first option that came along.

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.

Log Book Loans sound like they could be the answer to all your financial worries. All you need to do is complete a quick and simple Online application form, meet with a logbook loans lender representative and you can have a large sum of cash to get you out of a fix in 24 hours. Whether you have lost your job, suffered credit card bankruptcy, or just need a little extra cash to buy something you really want, the log book loan is sold to you as the perfect solution. There is a dark side to all of this though that is never discussed by the log book loans companies and which you need to know about before you even consider taking one of these loans out.

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.