The economy is not as it was before and even with the most cautious financial management practices, you may still have a hard time surviving on your salary alone. And with banks and other financial institutions constantly thinning the line on who can get a loan, getting that financial help can be a bit harder. However, a good alternative would be to get a logbook loan. They are fast, flexible and you could get a much larger loan. While this may seem attractive, these loans can place you in an endless cycle of debt. To avoid that, here are some tips you need to have.
Try limiting your payment periods
Logbook loans tend to have interest rates that increase almost exponentially. So when quoting your payment periods, avoid staying with the loan for too long. Don’t settle for the lowest monthly figure. Instead, try and quote a slightly higher value that will considerably shorten your loan repayment time.
Additionally, go for a logbook lender that doesn’t have any early repayment penalties, so that you can repay the loan whenever you run into some extra cash. That way, you could settle the whole amount in as little as 3 or 4 months as opposed to the agreed period.
Do your homework
As mentioned, logbook lenders are mushrooming all across the UK, so you should be really careful on what lender you go for. For starters, you need to do your research. Go for lenders that have an established reputation with a high number of positive customer reviews. You can use third party sites to compare different lenders. Here’s a useful link for comparison.
Remember, some of these third party sites may be scrupulous and squeeze as much money from you as possible.
Read the fine print
Another good tip you can go for is reading the fine print. That’s where the rules of the game are. Don’t be intimidated by the length of the document. The APR ate would only give you a good idea of the interest rates, but the fine print is what would inform you of what would happen in case you don’t pay on time, or the actions to take if you wish to alter your payments. Additionally, here’s where you’ll get to see any hidden charges if present.
Go for only what you need
Once you’ve decided on a lender, it’s time to decide on the amount. With your car as collateral, you’ll be in a position to borrow huge amounts of money, sometimes a lot more than you need. And here’s where things go wrong.
Failure to correctly asses your needs can cause you to get more than what you need. You’ll end up paying higher interest rates and in the event you fail to repay the full amount, you risk your car being taken away.