search

Pros and Cons of Logbook Loans

When it comes to loans, and I mean any type of loans, you need to have a good amount of knowledge about their good sides and their bad sides. It is one thing to know if you can apply for a loan and what is required, how much it will cost you at the end or what can you use as a collateral, but an entirely different matter to weigh the pros and cons of a loan.

Logbook loans, like any other type, have their advantages and disadvantages. If you are interested in applying for one of these with your local V5 lender, our suggestion would be to first carefully take a look at the pros and cons of this type of loan.

Advantages

  1. The biggest advantage of a logbook loan is most likely the fact that you can get it for any purpose. Unlike other types of loans, there are absolutely no restrictions regarding how you can spend the borrowed money.
  2. Second great advantage of this type of loan is that there is no credit check involved. In fact, you can borrow as much as £50,000 and still don't have the lender check your credit rating or history.
  3. These loans are also very quick to complete. It takes only 10 minutes and you can even get the money on your account within 24 hours. Compare that to having to wait for weeks for a bank loan, and you'll see how huge this advantage is.
  4. They are excellent if you are in a cash emergency. It takes only a couple of minutes to process the loan and the steps you need to undertake are very easy and straightforward.

Disadvantages

  1. The biggest disadvantage of this loan is the risk of your vehicle being repossessed. This type of loan requires that you use your car or other vehicle as a collateral. This means that the vehicle's V5 document is left with the lender and you can only get it back once the loan is paid back in full and on time. If you fail to do this, then the lender has every legal right to reposes it and sell it.
  2. It has a high interest rate. While it doesn't have as high interest rate as a payday loan does, one of the disadvantages of a logbook loan is its high interest rate. These high interest rates can result in you having to pay a much larger amount than the one you borrowed in the first place, so need to be very careful about this.

Okay, so those were the biggest advantages and disadvantages of logbook loans. Now that you know about them, hopefully you can make a more educated decision about whether you want to apply for them or not.