In this article, we discuss the advantages and disadvantages of
logbook loans compared to Individual Voluntary Arrangements (IVA’s).
Vehicle data major HPI says that the demand for logbook loans is on the
rise and estimates that about 30,000 logbook loans were issued last year
alone. Alternative lenders like those offering logbook loans typically
do more business during hard times for the economy because credit
availability through mainstream channels dries up.
As the name suggests a logbook loan is a loan secured against your vehicle and having a logbook loan on your car means that you run the risk of losing it if you default on the repayments to the loan company.
Logbook loans owe their popularity to the fact that they are quick to access as they are issued with no credit check. To avail of a logbook loan, all one usually needs is a car of sufficient value. Oftentimes even those who are considering starting an IVA are inclined to approach a logbook lender in order to meet urgent money requirements like debt repayments without taking recourse to an IVA.
Let’s get the fact straight. For all its ease and speed of access, logbook loans are an expensive form of credit with APR’s often upwards of 250%. If you are currently considering taking a logbook loan you are likely having existing loans and credit card dues which are beyond your current means to repay. While a logbook loan may look tempting you should be sure that you can make the repayments in time and close the loan in the timeframe agreed with the lender. You should bear in mind that missing payments will lead to additional costs being added to your account and the debts quickly increasing leading to a situation where you could have your vehicle repossessed. So first and foremost borrow only the bare minimum when taking out a logbook loan.
If you are short of funds to repay your existing debts and are considering taking out a logbook loan, an IVA may be a better option. What’s more, if you have already taken out a logbook loan you can still enter into an IVA. Also, if your car has already been repossessed for defaulting on your logbook loan repayments and there is a shortfall debt on the loan this debt can be included in your IVA.
So, when is a logbook loan a good idea? It is when you are certain you can afford the instalments, absolutely sure that there are no cheaper sources of credit available to you in your current situation and you cannot do without the money you are looking for under any circumstances. And if you are struggling with mounting debts already and are looking for money just to repay them you should consider an IVA instead. For, in such situations, a logbook loan can only bring you temporary relief.
To sum up, while considering a logbook loan, be sure that your situation rules out an IVA. And be prudent in managing your finances. There are thousands who have used logbook loans to meet their urgent money needs and reconstructed their finances.
As the name suggests a logbook loan is a loan secured against your vehicle and having a logbook loan on your car means that you run the risk of losing it if you default on the repayments to the loan company.
Logbook loans owe their popularity to the fact that they are quick to access as they are issued with no credit check. To avail of a logbook loan, all one usually needs is a car of sufficient value. Oftentimes even those who are considering starting an IVA are inclined to approach a logbook lender in order to meet urgent money requirements like debt repayments without taking recourse to an IVA.
Let’s get the fact straight. For all its ease and speed of access, logbook loans are an expensive form of credit with APR’s often upwards of 250%. If you are currently considering taking a logbook loan you are likely having existing loans and credit card dues which are beyond your current means to repay. While a logbook loan may look tempting you should be sure that you can make the repayments in time and close the loan in the timeframe agreed with the lender. You should bear in mind that missing payments will lead to additional costs being added to your account and the debts quickly increasing leading to a situation where you could have your vehicle repossessed. So first and foremost borrow only the bare minimum when taking out a logbook loan.
If you are short of funds to repay your existing debts and are considering taking out a logbook loan, an IVA may be a better option. What’s more, if you have already taken out a logbook loan you can still enter into an IVA. Also, if your car has already been repossessed for defaulting on your logbook loan repayments and there is a shortfall debt on the loan this debt can be included in your IVA.
So, when is a logbook loan a good idea? It is when you are certain you can afford the instalments, absolutely sure that there are no cheaper sources of credit available to you in your current situation and you cannot do without the money you are looking for under any circumstances. And if you are struggling with mounting debts already and are looking for money just to repay them you should consider an IVA instead. For, in such situations, a logbook loan can only bring you temporary relief.
To sum up, while considering a logbook loan, be sure that your situation rules out an IVA. And be prudent in managing your finances. There are thousands who have used logbook loans to meet their urgent money needs and reconstructed their finances.
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