Unexpected expenses can cripple those who don’t have savings. Consequently, many people find themselves turning to a loan as the only solution. However, the good news is that there is a wealth of different loan options to choose from nowadays. If you are looking for a short term solution the two main options are payday loans and logbook loans.
A payday loan is one that provides a small sum of money for several weeks – essentially to tide you over until payday. However, a logbook loan is secured against your vehicle; consequently, you will be able to borrow up to seventy per cent of your car’s worth. The lender does not take your car. They only have the right to do this if you fail to make the repayments you have agreed to.
So, now you know a bit about each loan, but which one is the right one for you? Essentially it all depends on your circumstances – how much money you need to borrow and how long for. If you merely need to pay a phone bill and you don’t have enough money until payday, opt for a payday loan. However, if you require something with greater flexibility you should go for a logbook loan.
Logbook loans are generally favoured because they allow individuals to borrow a greater amount of money for a longer period of time. Most lenders will allow you to borrow up to £5,000, obviously depending on your vehicle’s worth, and you can borrow this money for a period of two years if you wish. Thus, if you are not one hundred per cent certain you can find the money over the next few weeks, you should definitely go for a logbook loan instead.
Once you have decided what loan to go for, the only thing left to do is find the ideal lender for you. Make sure you find someone with a great deal of experience and a good reputation in the industry. Moreover, don’t forget to read every single word of the contract. You don’t want to end up crippled because of hidden terms and conditions.
Red flags to be wary of when looking for companies to provide you with a logbook loan
When people find that they are in a position whereby they need to borrow cash, they are often in such a rush to get the money they require and thus they end up going for a bad lender. This is because they literally go for the first company they find. This is never a good approach to take. Therefore, when looking for a company to provide you with a logbook loan, you should make sure you are wary of the following red flags…
- Early Repayment Fees – First and foremost, you will find a lot of companies charge their customers an early repayment fee. This means that if you want to pay back some of your loans early you will be charged for doing so. Why should you be punished for paying off your loan quicker than you are expected to? You should definitely stay away from companies with early repayment fees in place.
- Communication Issues – Does the lender have an email and telephone number on their website? If not, stay away. If so check them to make sure they both work, so you can be sure that the company is easy to get in contact with. You never want to go for a lender who is difficult to communicate with, as this is a massive red flag and issues are assured to arise. A solid contract is pivotal too. Collateral documents need to be official and you must understand everything in full before you sign on the dotted line.
- Bad Reviews – Last but not least, if a company has a wealth of bad reviews, then you should definitely stay away from them. These bad reviews have not accumulated by coincidence. Individuals have clearly been unhappy with the service the lender provides. When reading feedback it is imperative to consider the opinions as a whole. You should never be blinded by merely one review, as even the best companies in the world get negative feedback.
If you look out for the three red flags that have been mentioned, you should definitely not fall into the trap of lending from a poor quality company. So, be sure the company does not have early repayment fees, that their reviews are largely positive and that they are easy to get in touch with.