Common Complaints About Logbook Loans

I have pretty much discussed the convenience of logbook loans as well as the disadvantages so let me also discuss the complaints I hear about logbook loans. There are so many people who fall victim to bad logbook loan deals and you should try to not be one of them. Logbook loans are a great deal of help if you take it out with care and keep up with the repayments but once you get one in a rush without considering how the terms could affect you, it will be very difficult to find a solution.

  1. Interest rate is too high – I already discussed this from an earlier post and I cannot stress how high APRs are on logbook loans. You have to understand that what they advertise isn’t always the rate you are going to get so make sure you ask for a computation of the whole amount you will end up paying after the term and see whether the interest rate is fine by you. Logbook loans are expensive because of the high risk these creditors have as we have already established before.
  2. Tricky – more often than not, the reason many people complain about logbook loans is that they don’t read the small print on their loan terms. Now, once a problem arises, the logbook loan company will say that the policy is there in your debt agreement and you cannot do anything about it anymore. Lesson here is always read even the smallest print you see on the contract and ask as many questions as you want before signing. If at any time you think there is something that’s not clear, have it cleared ASAP.
  3. You car may not be enough to pay off your debt – even after repossession; you might still owe the logbook loan company some money. When they take your car, they sell it at an auction and it may very well not get the price you wish for it. Let’s say your car is auctioned at 1500 pounds and you owe 2000, you will keep on paying for the remaining 500 pounds.
  4. Lack of protection – this is easy to understand but hard to accept. In fact, the hardest to accept because you never expect to be a victim of this kind ever. When you surrender your V5 document and a Bill of Sale has been properly registered, the logbook loan company may already repossess it anytime you default on your repayment. It could be after a couple of months or after a day. It’s best to ask how lenient the company is beforehand. Once they take your car and it is established that they are not breaking any policies of fair trade, you cannot do anything about it anymore
  5. Debt collectors can be very annoying – the thing is if you miss your repayment, a debt collector may already harass you. This is very annoying aside from the fact that it is shaming too. The constant calls, emails, letters, which may be charged to you won’t stop until you catch up with your payments. You do have rights against unfair debt collection practices so you can fight back or just talk to your logbook loan creditor and arrange something with them directly.

The Advantages and Disadvantages of Logbook Loans

Because I have quite a bit of experience with logbook loans, I have found some advantages and disadvantages that are important to take note of before applying for logbook loans. As you can see with the reviews of the different logbook loans I mentioned, not all logbook loan companies are consumer friendly. Some will take advantage of your desperation. Some will try to mislead you into accepting the terms. Unfortunately, when all the problems arise some time later, it’s hard to find the help you need to sort things out.

Advantages:

Quick Cash – if you have an emergency, a logbook loan is very convenient to say the least. Depending on the value of your car, you can borrow quite a big sum of money and get it really fast. Some companies promise release of the cash in one hour if everything is in order so I could say that logbook loans are very convenient.

No credit checks – if you have bad credit then this is a good way to go because you get to borrow money without being judged with your credit rating. Of course we cannot always control our financial circumstances so I can say that not all people who have bad credit are people who make the wrong financial decisions all the time. I for one just had a very unexpected emergency that led from one thing to another until my credit was ruined. If not for a logbook loan I took out some time ago, I would still be struggling with my very bad credit until now.

Helps rebuild credit – although logbook loan companies do not perform credit checks before approval of your loan, the debt gets reflected on your credit report. This means that as long as you make your repayments on time all the time, you can show that you are creditworthy yet again. You can even pay off the loan early to show off a little, of course that is if you can and you’re not just borrowing from somewhere else again. Try to avoid bad decisions and you will soon be on your way to a better credit rating.

Disadvantages:

Your car is at risk – since you are using your car as security to the debt, you will risk losing it if you default on your payments. Legally the logbook loan company will be able to repossess your car and there’s not much you can do about it unless you can prove that the logbook loan company has mislead you or have unfair credit practices.

High interest rate – like you saw from previous posts, APRs could be as high as 498%, which is ridiculous I agree. The thing is, since there is very high risk for the logbook loan company lending money to people with bad credit, they charge high interest rates to cover their risks. Essentially, if you apply for a loan with very good credit rating, you can expect the lowest rates possible, but if you are applying for a loan with bad credit then that’s a whole different story. Beware of additional fees too. Ask the logbook loan about administration fees or early repayment charges before accepting the terms so you don’t end up being sorry a couple of months later. Know what to ask the representative and make sure they explain the terms well enough including the fine print.

V5 Loans LTD

Seeing an example representative APR of 498% in their website, V5 Loans Ltd is sure to be one of the most expensive logbook loan providers in the UK. This company is London based and people from England and Wales can borrow money from them. You can borrow from 500 pounds to 20,000 pounds and pay it back up to 78 weeks. They have the same day processing so you can expect fast cash as well. Since there is no mention on whether they do have early repayment charges or administration fees, it’s best to make sure you ask them about these if you decide to go for this company.

What sets V5 Loans Ltd apart is that they accept vehicles that are still under financing, albeit should almost be done. Most logbook loan companies ensure that you should have already paid off your car’s financing but V5 Loans Ltd will accept your car if there is very little financing left. Apart from that though, you cannot find many independent reviews about this lender.

Their criteria are pretty much the same as other logbook loan companies. You must be residing in Wales or England, at least 18 years old with a car that is not older than 10 years and your car’s logbook should be valid, with insurance and MOT.

Buying A Second Hand Car with a Logbook Loan on It

Ooops! Big problem here. Even if you do perform the necessary checks before buying a second hand car, there’s a chance a problem like this could slip right under your nose. Here’s a very helpful article I found from AdviceGuide that I hope you will find interesting too:

http://www.adviceguide.org.uk/scotland/consumer_s/consumer_cars_and_other_vehicles_e/consumer_problems_with_the_car_you_bought_e/consumer_the_vehicle_you_bought_doesnt_match_its_description_e/you_have_bought_a_car_that_has_a_logbook_loan.htm

Unfortunately it could be very cumbersome if you get caught in a situation like this. Legally, the logbook loan company is the owner of the car until the debt is paid off. You would have to go through quite a bit of stress to get this sorted out. The article will show you steps you need to do and who you can contact to assist you.

Logbook Loans

Fast cash with logbook loans – a deal that sometimes sounds too good to be true yet many take advantage of or should we say many are taken advantage of.

 This is Paul. I want to talk about logbook loans and share as much information as I could about this kind of deal. There’s a lot of controversy with this kind of car loans because of the very high interest rates and the risk of cars being repossessed. However, considering the logbook loans do have benefits that many people badly need, risking may well be very worth it.

Personally, I think logbook loans are great but only for those who know they can manage their finances pretty well. If you need the cash badly and you need it fast, a logbook loan is a fantastic solution. The only problem is, if you’re in a hurry, you tend to oversee the important details. Thousands of people don’t read the fine print when they absolutely should. So here’s my take on logbook loans and I hope you learn a lot from it.