No doubt, a big number of people complaining about logbook loans are those with an excellent credit score who have never had to grapple with rejections when they badly needed cash urgently. However, those with bad credit vouch that logbook loans are a godsend, the perfect loan facility when they urgently need money. That said, in as much as logbook loans are beneficial, there exist a number of misconceptions regarding them. Some of these misconceptions include:
Logbook loans are exorbitant and unaffordable
It goes without saying that all types of loans accumulate some form of interest and logbook loans are not an exception. However, to say that logbook loans are the most expensive would be an exaggeration and a fallacy. Payday loans are more expensive than logbook loans. While logbook loans have an average APR of 400%, the average APR of payday loans is 1000% which in essence makes logbook loans relatively cheaper.
You need to be in employment to be considered for a logbook loan
This is purely a misconception as you can avail a logbook loan so long as you provide proof of income. It’s not a must that you be employed and receiving a payslip. Even those who are self-employed or working part-time can be considered for a logbook loan. In other words, if you can show proof of your capability to repay through the provision of bank statements, you will be able to avail a loan even if you are not in full-time employment.
Logbook loan lenders are just sharks waiting to pounce on you on the first default
This is not true and simply a misconception. The truth of the matter is that most logbook loan lenders resort to car repossession as a measure of last resort. Don’t avoid calls or go underground when you experience problems repaying your loans. Simply talk to your lender and come to an agreement on how payments will be made moving forward in the reflection of your current financial circumstances.
Logbook loan repayments take a long period of time
No doubt, logbook loans have a longer repayment period compared to payday loans. However, the period of repayment is entirely up to the borrower and not the lender. You can actually repay your loan earlier if you wish to.
Only a car is accepted as collateral
There is no written rule requiring that only individuals owning a car can be considered for a logbook loan. Even those owning a motorcycle, a lorry, a van or even a truck are eligible to apply for a logbook loan. However, applicants can only avail an amount equal to half the value of their car according to prevailing market rates. If you are keen on learning about logbook eligibility rules and documentations required, be sure to read detailed information from this source.