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.

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.

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.