Its easy for us to harp on about the negative aspects of the car log book loan, but at the same time it must be admitted that they are a legitimate financial product that deserves it place on the market like any other. It has to be up to the consumer to make a decision about which loan products to use without any higher authority telling them what they can or can’t do.

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.

The first thing that anyone notices when they investigate logbook loans is the size of the interest charges which are levied on this product. We all know that interest charges are the way in which a lender makes money from their endeavors but the difference between the rates at the high street bank and those from a log book loans lender can be difficult for anyone to gasp.

Log book loans interest rates tend to be pretty standard throughout the industry and sit at around 430% which if you are unfamiliar with loans in general, will probably not mean all that much to you. Let’s put it this way if you are in desperate need of cash and decide to use the services of a car title loans company and take out an 18 month loan for the amount £1500 how much do you think you would have to pay back over the loan period to get rid of your debt? The answer is over £4000, and that doesn’t include any of the charges which may be levied for late payments or the fact that your car could be taken off you if you default on the loan.

What about loans from the banks?

Obviously people make use of log book loans because they can’t get access to money from the high street banks but how much would a £1500 loan from one of these institutions cost? Its not unreasonable to find a personal, unsecured loan at the rate of 8.9% APR these days so we’ll use that as a startling point. So you go along to the Bank of Scotland and ask the nice woman behind the counter for £1500 think you very much. You get your loan and agree to repay it back over 2 years so you get even longer than with the log book loan in the example above. Your repayments with the bank would be £78 per month over 24 months meaning in the end you will have paid back a total of £1,867 or interest of only £367 compared to over £2500 interest with the log book company. Which loan seems like the best value to you? Not really much of a contest is it? Lets not forget you don’t have to put your car at risk when getting cash from the bank which makes it even more attractive.

How can a log book lender charge this much?

These companies get away with charging so much money because the consumers who use the product get themselves into a situation where they have little choice but to turn to predatory lenders to remedy their cash flow problems. Unfortunately if you have a bad credit rating or need money in a hurry you are going to find that high street banks won’t wan to touch you with a bargepole. So we turn to instant cash loan lenders and the like to fill a gap and more often than not end up in an even worse state than we started.

There are no simple remedies to this situation, if you need cash in an emergency there is often little choice available. If you find yourself out of cash on a regular basis then you need to reconsider how you manage your finances. Find ways to cut back on your expenses and try to put a little money aside each month so that if you even run in to a problem that requires a quick cash sum you have the ability to get over it without using the services of these log book loans lenders.