Getting a Good Deal on Your Logbook Loan
There are dozens of logbook loan providers across the United Kingdom, so it can be hard for you to tell whether an offer you’ve received is a good one.
Fortunately, there are a few standards you can consider and a few ways to tell whether you’re being scammed, too.
Avoiding Logbook Loan Scams
There are some companies on the internet today that seem just like legitimate lenders. They provide you with a wealth of information, explain the entire process, and offer you the option to enquire online. Unfortunately, not all of these lenders are safe. Some companies make their money by scamming you out of yours, so it’s important to stay alert. Here are some signs that you might be falling into a trap.
- You’re asked to pay fees upfront before you get your loan. Although it’s very true that some lenders may charge you a processing fee, a legitimate lender will never ask you to make any kind of upfront payment. Any fees associated with the loan will be added to the loan’s total value, which you’ll pay over time.
- You aren’t asked to provide your income or employment information. Although it may seem like a bit of a hassle, legitimate lenders will ask you to verify your employment and your income. If a potential lender leaves this information out, chances are good they just want to scam you.
- Your offer seems too good to be true. Sometimes, companies that try to con you don’t necessarily want your money – they want your information. To get it, they’ll often “approve” you for a large sum of money – more than what your car is worth. If this is the case, don’t sign any agreement, and don’t provide any personal details.
If you come across a lender that appears to be fraudulent, you can report that lender to your local police department. They should be able to advise you on the next steps to take.
What Constitutes a Good Deal on a Logbook Loan?
Because all lenders are different, not every offer you receive will be the same as the next. You might find that different lenders vary in proposed loan amounts, interest rates, and repayment terms. This is not unusual, and it actually gives you an opportunity to shop around for the best option for your needs. Here are some tips and tricks for making sure you aren’t selling yourself short.
- Don’t accept a loan for less than 80% of the value of your car. If you do, you’re not getting the best deal out there. Keep in mind that your loan value may be lower than this if you still have financing left on your car. Some lenders will give you a loan even if you still owe, but they will decrease your loan amount to cover that financing.
- Don’t accept an extraordinarily high APR, either. There’s no denying that the APRs associated with logbook loans are quite high. Some lenders may charge a 100% APR, and others may charge closer to 450%. However, you should never accept a logbook loan with an extraordinarily high APR. Doing so may end up costing you thousands of pounds in the long run.
- Opt for repayment that suits your needs. If a lender doesn’t offer you some flexibility in your repayment, you should look elsewhere for your loan. You shouldn’t be forced to repay your loan over the course of nine months if the payments are too high for you to afford, so make sure the agreement you sign contains a payment schedule that is comfortable for you.
Because logbook loans are associated with high interest, and because different lenders offer different things, it can be hard to tell if you’re getting a good deal when you’re presented with an offer. The tips provided here should make it simpler for you to decide whether to accept or decline a potential offer.