Log Book Loan - Why Use One?
A log book loan can give quick and easy access to money at short notice and so can seem like a good solution to an unexpected financial crisis but they are not for everyone as they come with a high interest rate. So should you even think about getting one?
Life can throw up unexpected problems that can strain your finances to breaking point and it's times like this, and especially when you have a poor credit rating, that a log book loan can help you just so long as you are sensible about it.
If you know that the problem is short term and that afterwards you'll be able to meet the repayments easily or even pay off the loan early then a log book loan is a viable choice for you. Vet bills, repairs bills etc are a perfect example as to why you might need a loan of this nature.
If you have just lost your job or you're looking to pay the repayments on other forms of debt then a log book loan is a bad choice as the interest rates are just so high. Nor should you consider using one for the more trivial things in life like holidays and doing up your house.
Private individuals are not the only ones who use log book loans. Small businesses also use them as any vehicle with a V5 log book can be used as collateral for a loan. One of the most common reasons for a business to go under is because of a cash flow problem. You're owed money by someone and before they've paid up you get a demand for money from someone else and the money isn't there yet to pay them.
It's surprising how a small hiccup in your cash flow can quickly become a crisis in a small business. In cases like this a log book loan can ease things until the problem is resolved. When you get the money you're owed you can then pay off the loan and cut your losses.
Log book loans do provide a useful means to obtain a loan in a crisis but always think hard before getting one and always, always read the small print to see what you are signing up to.