Thinking about getting a logbook loan? Please refer to our guidelines first before deciding.
Be Aware of the Costs
We have to tell you upfront. Logbook loans don’t come cheap. They can be very costly, especially if you compare them to a regular loan that someone with good credit can obtain. However, that’s just the thing with credits and loans – they’re like a seesaw. When the other goes down, the other goes up.
Whenever you’re applying for any loan in general, not just logbook loans, you should know exactly what all the costs are. Don’t be blinded by promises of low interest rates when there are too many factors to consider, such as setup charges, late fees, early settlement fees, etc. Also be sure to make your repayments on time to avoid incurring further unnecessary costs.
Understand the Risks
A logbook loan, just like any other types of loan, is not without its risks. You should think several times before making up your mind, especially when a valuable collateral would be at stake. If you failed to hold up to your end of the deal, you can lose your beloved vehicle just like that.
Additionally, just because you may already have bad credit does it mean that your credit won’t be affected any further. If you are late on your logbook loan repayments, you are at risk of bringing additional damage to your credit rating. If your score drops further, then it might be more difficult to fix it.
Is It for You?
While absolutely a reasonable option for anyone with cash and credit problems at the same time, a logbook loan is NOT for everyone. Before subjecting yourself (and your property) into any type of financial agreement, always weigh out the pros and cons, and make sure that all other options are exhausted.
A logbook loan, even while lasting only for a short duration, should require full dedication and commitment. A single missed payment can cause further burden to your finances and your credit. Additionally, a logbook loan, or any loan for that matter, should never become a long term solution for your cash flow problems. If you find yourself constantly short of cash month after month, you need to seek professional advice. Be sure that before taking out any loan, you will be responsible and fully aware of the risks.