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Buying a car | 25.02.2014 - 10:51

Warning signs you should look out for when taking out a logbook loan

More and more people are turning towards a logbook loan when they need to lend some money. This article ensures you don’t fall into the trap of any unreliable companies.
logbook loan

A huge number of people are experiencing financial difficulties in the UK at the moment. Struggling to pay your bills or put food on the table is something nobody wants to encounter. Nonetheless, the shining light is that there is help available. There are many different lending options for people who need to borrow cash, such as a logbook loan.

This is a loan secured against your vehicle. Typically you will be allowed to borrow up to 70 per cent of your vehicle’s current worth. You still get complete access to your car. However, if you fail to make the repayments, the company in question has the right to seize your vehicle.

This is an excellent lending option. Nonetheless, you do need to be careful regarding whom you choose to borrow the money from. Read on to discover some common warning signs you should look out for when finding the best company for a logbook loan…

Firstly, let’s begin with one of the most obvious red flags. As mentioned earlier, you should never have to hand over your vehicle when taking out this type of loan. If you come across any company offering logbook loans that state they will take your vehicle until you have made the payments, you know they are not legitimate and you should avoid them.

Unfortunately one of the major warning signs is when a loan seems too good to be true. You need to bear in mind the fact that these companies are looking to make a profit. If the repayment terms seem too favourable then you need to ask yourself why? Are there going to be hidden fees in the contract perhaps? It is important to find a loan deal you are happy with, yet you need to be realistic at the same time.

Sadly, a lot of people end up stung when they want to make early repayments. They take out a loan secured against their vehicle and then they are pleased as they have the cash available to pay off some of the money early. This satisfaction soon turns to disappointment when they realise they have been charged a significant amount of money. Unfortunately, there are companies who charge their customers for making early repayments. As this is something most people do not think to look out for, it can end up being a major issue for many.

Last but not least, you should do a little bit of digging online. If you notice there are a lot of negative reviews regarding a company, this should act as a massive warning sign. After all, it is unlikely that this is a coincidence. When individuals have experienced a bad service they tend to take to the Internet to warn others so they do not encounter the same.

If you take all of these factors into account you should be able to find a legitimate company who offer good terms on logbook loans. You definitely won’t fall into any of the traps that are unfortunately present in the industry.

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