Logbook loans have been getting a bad rap lately, thanks to the overwhelming number of people who have had worse financial situations after taking out the said loan. However, regardless of how risky a logbook loan is, there’s no denying that sometimes it may be the only solution to bail you out of a cash emergency. Contrary to popular belief, you can take out a logbook loan without going broke for the rest of eternity. Here are a few tips.
Make Your Payments on Time
One of the most common factors that make a loan expensive is the timeliness of your payments. Every time you miss your due date, you’ll be subjected to late charges and other penalties that go on top of your repayment amount, making it even harder to pay off as time goes by.
Borrow Only What You Need
Because of the substantial amount tied to your vehicle, it could be tempting to borrow as much as its market value allows. However, keep in mind that if you borrow in excess of what you need, you’ll most likely waste the money on things you don’t need anyway. Keep your debt to a minimum so you’d have lower interest charges and you can pay it off sooner.
Inquire About Early Repayment
While paying off your full loan amount earlier than expected wouldn’t cross your mind, this is something that you should definitely think about even if you think that you don’t have the money right now. For instance, if you received a bonus from work, an inheritance, or perhaps won the lottery, it would be wise to settle the debt as quickly as possible, and of course, you’d want to do it without any additional charges.
Never Stretch Your Repayment Period
One of the best things about a logbook loan is the flexibility of their repayment terms, in that you can choose how often and how much to pay. While you might want to choose the lowest repayment amount possible, keep in mind that this prolongs the time that the loan is withstanding, thus accruing more interests.
Find a Reputable Lender
In the UK, logbook loans are regulated under the FCA, and the lenders must follow a strict code of practice. Finding an authorised lender reduces the chance of suffering from unfavourable loan rates. In fact, authorised lenders will compete for customers by offering the best possible terms.
Do not be afraid to shop around. While logbook loans are generally seen as an expensive type of loan, there’s a good chance you’ll find what you need by doing your homework. For more loan options, visit Just Logbook Loan and get a quote for free!