An article explaining what a logbook loan is and how you can ensure you are getting the best value for money from your loan.
It’s no secret that times are hard. For the past five years (and counting) we have been increasingly inundated with news that global economies are failing, governments are teetering on the edge of bankruptcy and national debts are spiralling way out of control. But while this can feel very remote, our worldwide financial crisis is having some effect on us all, with personal finances suffering too. A double-dip recession in the UK has led to an increase in unemployment, a rise in job losses and a freeze or reduction in pay for many workers. Those on benefits are being squeezed, those in work are being increasingly looked to for more taxes and credit is becoming harder to come by.
That’s a pretty bleak picture so far, but in finance it is important to face facts and not bury our heads in the sand. The government has advisers and economists to help shape its spending policies, but for individuals it can be hard to know how to effectively budget and meet all of our financial commitments. Those on fairly modest incomes can often find themselves struggling at the end of the month, with fuel and food prices rising and if you are also paying off debts this can be a real strain on your household budget. If you find that you are regularly spending more than you earn, it’s time to take a long, honest look at your finances to see if there are areas you could cut back on, or any way of bringing in more cash. Debt management companies can help you to plan a more feasible programme of repayment and it could be you could take on some extra shifts at work to help ease your financial burden. If, however, you are managing perfectly well but have a sudden financial emergency, it can be difficult to know where to turn for help.
An unexpected bill, a family emergency, a faulty boiler, a broken computer… there are lots of things that can come from left-field and unless you have some contingency savings you will need to borrow some short-term credit to tide you over. Taking out loans against your car is one way of doing this known as a logbook loan, essentially you are borrowing money against the value of your car. If you choose this option, you need to make sure you can afford the repayments it is intended as a loan to carry you until the next payday as you could lose your car if you don’t make your scheduled repayments.
To improve your chances of getting the best amount of credit for your car, you need to make sure that:
You are the registered owner
Your car is free from existing finance or credit
You can prove you have a regular income
Your car is in a good state of repair
The vehicle is fully taxed
You have a valid MOT
The vehicle is properly insured
Taking loans against your car should be seen as a short-term measure and in these circumstances can be a useful way out of a financial difficulty.
Ilena is a financial expert who regularly writes about related topics on a series of websites and blogs. She has recently been explaining through her articles how to get effective loans against your car.