The press is spending plenty of time writing about UK logbook loans, mostly due to the fact that the economy is forcing individuals to use them at a higher rate than ever before. A lot of folks have bad credit ratings nowadays and it makes sense that lenders to target people with poor credit are getting more business and taking advantage of the situation.
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.
