Things to Consider Before Applying for a Logbook Loan

When you’re left with no choice but to resort to logbook loans to meet your financial emergency, it doesn’t mean you shouldn’t plan your borrowing. With logbook loans high interest rates, weighing your options carefully is of essence.

Here are things some things to keep in mind when taking out a logbook loan:

Amount to borrow

Logbook loan lenders offer amounts from £500 up to £50,000. The maximum amount you can borrow will depend on your vehicle’s value and your monthly income. In any case, it’s crucial for you to carefully plan the amount to borrow as well as the length of time you can afford to repay said loan.

Annual percentage rate (APR)

When looking for a logbook loan, one of the key things to closely look at is the annual percentage rate (APR). The APR is the percentage lenders use to advertise the cost of their loan offers. For logbook loans, the average representative APR is 400%. Compared with most types of traditional personal loans, logbook loans have high APRs. It’s best to repay your loan as quickly as possible. To know more about APR and how it works, click here.

Early repayment charges

If you decide to repay your logbook loan early, make sure to speak with your lender first. Most lenders have early repayment fees if you repay more than £8000 in 12 months. You’ll likely end up paying more in the end because of certain fees you may not know about from the onset. Speak with your lender or read the fine print to know more about early repayment chargers, admin fees and other hidden fees.

Risk of losing your vehicle

When it comes to secured loans such as logbook loans, the most important thing to remember is the high risk of losing your asset. In the case of a logbook loan, your loan is secured on your vehicle. This means probability of repossession especially if you are unable to keep up with your monthly repayments.