With so many loans shown in a positive light by the company offering them, it can be very easy to think that you can't fail when deciding on a loan. But the reality is very different, there are certain loans you need to stay away from. One of them is showcased below.
Logbook Loans - The One You Need To Avoid
Logbook loans are usually being considered by those who don't want to commit to payday loans.
These loans are commonly available to anyone who owns a car and the applicant will not have to pass a credit rating check to become qualified.
What lenders will do is offer you a certain percentage of the value your vehicle currently has on the market. They'll take V5 registration document, insurance certificate as well as the MOT certificate as a security.
Legal Transfer of Vehicle
What you will need to sign to get this financial loan is a 'bill of sale and a credit agreement. This means that the legal owner of the vehicle will become the lending company at it will stay a legal owner up until you pay off the loan. In case you miss your monthly payments, the vehicle owner (lender) will be able to sell the car to recover its losses.
Lender will get all the money from the sold vehicle and you will be asked to pay more money in case the car's value was not sufficient to cover for the loan.
And if you think the situation is not that bad, consider this - the average APR for this kind of loan may get to a 500% mark.
You should check out the following link to discover more about logbook loans - http://www.citizensadvice.org.uk/index/campaigns/current_campaigns/recent_campaigns/logbook-loans.htm
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