Logbook Loans

A logbook loan is something that some people are not familiar with. It is a short term loan, where you borrow money using a vehicle as collateral, usually your car.

The lender will need to look at your vehicle before you are given the loan. They will estimate the value and then deduct any other finance you have outstanding on it, such as a car loan and then will decide how much to lend you. It will not normally be the whole remaining value as they will want to be sure that if you have trouble paying it, they will be able to sell the car and get back what is owed.

The terms of the loan are pretty strict. You will be required to repay a certain amount each month as with any other loan but they will repossess the car if you miss a repayment. This means that you could be at risk of losing your car if you miss even one payment. Some companies may be more lenient than others and it is always worth finding out more about how strict they are likely to be before you take out the loan. Take a look at the terms and conditions but also talk to the company. Read reviews too, in order to find out what other people think of them.

The reason that the loans are called logbook loans is that some companies will make you give them the logbook to the car and so the effectively become the owners until the loan is paid and they return it to you. This gives the lender more control than they would with a traditional payday loan. This should help the vehicle owner to realise that they need to make sure that they pay the loan back when required or else they will lose their vehicle.

If you look online you will see many tales of people that have lost their cars due to having this sort of loan and getting behind with the payments. However, these sorts of stories are often highly publicised and you do not hear so much about those that used the loan successfully, paid it all back and were fine. You need to try to look at both sides to enable you to have a balanced view about whether it is the right sort of loan for you.

As with many short term loans, the amount lent on a logbook loan, will not be huge. However, the charges can be quite high and the consequences of not paying are also big. It is well worth thinking really hard before taking out a loan like this. You will need to think hard about whether you will be able to make all of the repayments and on time and whether you will be able to afford them each month and cover all of your other costs as well.

It is worth considering whether you are prepared to use your car as collateral. Imagine the situation where you do get it repossessed and the impact of that. It could mean that you are not able to go to work or see your friends and family. It all depends on how much you use and rely on your vehicle. If there are alternative ways to travel then you should be okay, but otherwise you may find that you will need to make sure that you do not lose the car or else you may need to give up your job or not see people and that could have a significant impact on your life. Therefore you will really need to think hard about whether getting the loan is the right thing for you and whether you can afford to take the risk.

When taking out the loan, it is easy to assume that you will be able to cover the repayments without any trouble. However, in reality this is often not the case. Make sure that you will have enough free each month to cover the repayment and then consider how you would manage if you had extra expenses that month or unexpected bills and how you would cope with that. Maybe you have savings you could fall back on, but if you do, you might be better using these now rather than taking out the loan in the first place, it would be a lot cheaper. If you are not sure that you would manage the repayments then avoid the loan as you could end up worse off than before.

The best customer for a logbook loan would be someone who does not rely on their vehicle and has no savings to cover the cost of what they need the loan for, but has a regular income with plenty left most months to cover the loan repayments. The problem is that most people would only need a loan because they did not have a high enough income to cover the bills and so repaying could be very difficult.

Business

If you have a business then you may want some extra money in order to expand, buy stock, take on new staff or for other things. You may even be getting a loan to start up a business. The problem is that a loan is a big commitment and so you need to be really careful when you take one on to ensure that it is the right time. But knowing when the right time is can be tricky and it is really worth thinking about the decision very carefully.

The most important thing to consider when looking at loans is the repayments. You will need to commit to repaying a certain amount back each month and you need to be sure that you have the money available to be able to do this. You will be able to see how much money you normally have available each month on a normal month with regards to your business profit and so you will know how much you will be able to afford to spend. Of course, there is no guarantee that you income and expenditure will remain the same, but looking back at previous months will be the best way that you can predict it. You may think that you will be able to make up any difference with your own personal money, but you really need to keep business finance separate form personal finance as you will struggle personally if you end up having to make all the business loan repayments by yourself.

It is worth thinking too about what you think the loan will do for the business. You need to use it as an opportunity to help you to expand or grow the business, investing in something that will bring in more profit. Although this sounds obvious, it is really important to put together a business plan so that you can check that you really will be improving the business with the money. Some people may also get the loan to cover costs such as salaries, but this is unlikely to make a significant change to the company and is unlikely to result in a bigger income being produced from it.

It is also worth considering the general economic situation when you are considering whether or not to take out a loan. You will need to think about the future and whether interest rates are likely to rise and whether you will be able to cope with the increased interest payments if this happens. Also consider what other economic changes may take place and how that might affect your business. If you think that there may be changes that could have a negative impact on your business then it could be a good idea to avoid borrowing money for a while. It can be difficult to predict what might happen but if there are major elections or any other possible political outcomes that may worry investors, the market, spending and things like that then it is worth waiting to see what impact these may have before you borrow money.

Many people start their business with a loan and this can be the most risky time to take one out. You will not know whether you can make a success of your business as you will not have even tried yet. It can be difficult starting without any money, but if you are starting with a loan then think really hard before doing so. Obviously you will have to draw up a business plan to borrow money, but on top of this imagine different future scenarios, with regards to income not coming in, interest rate rises and things like that and imagine how you will cope, both as a business and on a personal level. It is not easy to predict what might happen in the future, but imagining the worst can actually help you to make sure that you will cope.

It is also worth taking a look at what business loans are available and how good the terms are. You may want to only take out a loan when you can get a good one. You may be looking for a competitive interest rate and good repayment terms. Make sure that you compare all of your options but only take a loan that suits your needs rather than one that looks the best form the choice available. It may be much better to wait until a better deal comes along rather than go with something that isn’t what you were looking for. Think it through and make sure that you are doing the best thing for you and your business.

So there are a lot f things to think about when getting a loan and timing it right is important. Obviously you will not want to borrow money without good reason, but you will need to make sure that even if you have good reason, you time it right according to the economy, state of your business and your personal finances.

Loans

Often when people have a mortgage and they want some more money they choose to increase their mortgage rather than taking out a personal loan. This can be a good idea, but sometimes a personal loan can better or possibly even a different sort of loan altogether.

If you just compare interest rates when you are looking to borrow money then you will be likely to see that the mortgage rates are lower. This would then make you think that it would be cheaper to borrow extra money on the mortgage if you want some. However, this may not be the case.

Most interest rates include fees and charges as well, spread out in each monthly repayment and this means that if a loan is a very long term loan, these will be lower and a short term will be higher. This is why the interest rate will be higher on a short term loan. There may also be fees and charges added in on top of interest in some cases and this needs to be accounted for as well.

The very best way to see what will be the cheapest way to borrow is to calculate the total cost of the loan. So if you are thinking of borrowing some extra on your mortgage, calculate how much interest you will pay on that each year and how many years are left to find out the actual cost of the loan. If you want to compare with a personal loan calculate the interest in the same way and add on the administration fees and any other charges. Do this for all possible options and then you will be able to compare how much each will cost.

Of course, cost may not be the only factor. You may not be able to afford the repayments if you take out a loan for a short period of time. You may find it easier to add it onto your mortgage and then make smaller payments over a longer period of time.

Time could also be a factor as you may need the money quickly. It could be easier to ask to add on some money to your mortgage than to organise a new loan. However, it may be that a loan is quicker, it will depend on the lender and what checks they want to do etc. It is good not to rush if you can, as you want to take the time to research the best possible loan for you, but if you have no choice then you may just need to pick the quickest.

You may also be limited by how much you want to borrow. If you only need a small amount then you may not be able to get it form a mortgage or loan but you may have to use a credit card, overdraft or short term loan. This is a more expensive way to borrow with regards to the interest rate but as long as it is paid back quickly it can be cheaper than spreading the loan over a long term as explained before.

You may feel that you want to borrow form a place that you know as well even if they are a bit dearer. You may want someone you can trust with a good reputation. You may feel that customer service is important and you want to find out about that first and choose a lender which has good customer service. You may also decide that you want someone that has good reviews and have a look at those as well.

It can be a difficult choice but it is worth doing a lot of research first if you have the time. The cost of the loan is important and make sure that you calculate the full cost including the fees and charges so that you know exactly how much it will be. You also need to think about the specific lender and if there are any features that you will be looking for in them that will be important to you. If you are unsure or not confident in doing the calculations then it is wise to get financial help. If you are borrowing a lot of money then it could be wise to see a financial advisor as they should be able to help you find a solution that will save you more money than the fee that they charge. There may also be free help available from a money service which could help you. You could also ask friends and family for help as they will be able to let you know what they have done in this situation and what they think you should do. Getting help and reading things online should help you to make a better decision. This will take time but it is worth doing as you could end up saving a significant amount of money.