The use of logbook loans and payday loans is quite common these days.
Some people argue that logbook loans are beneficial while others hold
that payday loans are a better choice. However, each of these loans has
its own benefits and drawbacks.
Logbook loans and their advantages
Logbook loans are secured against the vehicle document or car logbook. The borrower can avail up to about 1,000,000 dollars as loan and the time of repayment is longer. In order to obtain a loan, the borrower must be at least 18 years, have a decent income source and own a finance-free car. The process of application is completed within two business days. The lender provide loan after determining the value of the car. The borrower has to provide his income proof, sign some documents, leave his car logbook with the lender and get the loan amount.
Disadvantages of logbook loans
However, if the borrower fails to pay the loan, the lender can sell the car and settle his loan against the sale proceeds. Moreover, if you need money the same day, you may not opt for these loans because the process of application and lending usually takes two to three days.
Payday loans and their benefits
Payday loans are a short-term loan facility which is useful in solving small and urgent financial obligations that come up between two paychecks. These are unsecured loans and the amount of loan ranges between 100 dollars to 3,000 dollars. Any person, who is above 18 years of age, has a gainful employment and a checking account can apply for a payday loan. The process of application is quite simple and quick. If the application is approved, money is quickly transferred in the checking account of the borrower within couple of hours through wire transfer. The borrower is required to repay the loan on his next payday.
Drawbacks of payday loans
However, the rate of interest is very high ranging from 20 percent to 40 percent per month. Moreover, a borrower has to bear late payment charges and other fees.
Comparison of logbook loans and payday loans
Payday loans are relevant for small short term emergency expenses between two paydays while logbook loans are perfect for big purchases and major expenses. The time of repayment of logbook loans is much longer compared to payday loans where a borrower has to repay the loan on his coming payday. Similarly, payday loans are quite costly in terms of interest. Logbook loans are secured; lenders don’t check the credit ratings of borrowers. On the other hand, payday loans are unsecured and the borrower’s credit history is checked while lending money.
Both these loan facilities offer certain benefits and have their own drawbacks. Payday loans are ideal for meeting short term financial expenses which are unavoidable and has to be met the same day. Logbook loans are suitable for major expenses requiring huge amount. However, logbook loans turn out to be a better choice for most of the circumstances in terms of interest and repayment.
Logbook loans and their advantages
Logbook loans are secured against the vehicle document or car logbook. The borrower can avail up to about 1,000,000 dollars as loan and the time of repayment is longer. In order to obtain a loan, the borrower must be at least 18 years, have a decent income source and own a finance-free car. The process of application is completed within two business days. The lender provide loan after determining the value of the car. The borrower has to provide his income proof, sign some documents, leave his car logbook with the lender and get the loan amount.
Disadvantages of logbook loans
However, if the borrower fails to pay the loan, the lender can sell the car and settle his loan against the sale proceeds. Moreover, if you need money the same day, you may not opt for these loans because the process of application and lending usually takes two to three days.
Payday loans and their benefits
Payday loans are a short-term loan facility which is useful in solving small and urgent financial obligations that come up between two paychecks. These are unsecured loans and the amount of loan ranges between 100 dollars to 3,000 dollars. Any person, who is above 18 years of age, has a gainful employment and a checking account can apply for a payday loan. The process of application is quite simple and quick. If the application is approved, money is quickly transferred in the checking account of the borrower within couple of hours through wire transfer. The borrower is required to repay the loan on his next payday.
Drawbacks of payday loans
However, the rate of interest is very high ranging from 20 percent to 40 percent per month. Moreover, a borrower has to bear late payment charges and other fees.
Comparison of logbook loans and payday loans
Payday loans are relevant for small short term emergency expenses between two paydays while logbook loans are perfect for big purchases and major expenses. The time of repayment of logbook loans is much longer compared to payday loans where a borrower has to repay the loan on his coming payday. Similarly, payday loans are quite costly in terms of interest. Logbook loans are secured; lenders don’t check the credit ratings of borrowers. On the other hand, payday loans are unsecured and the borrower’s credit history is checked while lending money.
Both these loan facilities offer certain benefits and have their own drawbacks. Payday loans are ideal for meeting short term financial expenses which are unavoidable and has to be met the same day. Logbook loans are suitable for major expenses requiring huge amount. However, logbook loans turn out to be a better choice for most of the circumstances in terms of interest and repayment.
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