Why Logbook Loans are to be Avoided

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You must have heard that money doesn’t come cheap and know that nothing in this life is given for free. If you are in a tight money jam and are in need of cash in a hurry there are many ways that you can get the money you need very fast. When you use these products there will not be many questions asked in the approval process when taking out the loan, afterward though there might be complications that you won’t be made aware of. Log book loans are to be avoided if you know you will not have the means to pay the money back with interest. Lenders require no credit score. They will give the loan to you if you are major 18 years old and have a stable job with a decent enough income to qualify.

What are the disadvantages of contracting such a loan? The main disadvantage is the fact of losing your car because it was using as collateral and will be repossessed in the event you miss out on payments. Medical emergencies will not be able to be solved by using the car and you will also lose the means of going to work. Full ownership of the vehicle is given when the contract is signed and afterward it is like you would be renting the bank’s car to yourself. When you manage to give back the loan with interest the ownership of the vehicle will be returned to you.

Extremely high interest rates are the second reason why you should stay away from logbook loans. The bank works with Annual Percentage Rates and borrowing from the bank is safer than using a lending company. Lenders charge even with 10% more than the APR making the loan more difficult to be paid off. This fact alone should make you turn back if you lack the means of paying the loan on time.