Tuesday, 25 February 2014

The Difference Between Logbook Loans and Payday Loans

The difference between Logbook Loans and Payday Loans?

There are many opportunity's nowadays to apply for short term loans if you are strapped for cash. If the bank have refused you a loan and you have a bad credit history, you may be looking for alternative lenders who will lend to those who have credit problems, in the form of short term loans. Two of the most popular loans are Logbook Loans and Payday Loans.

Providing you are sensible and are not reckless there are loans out there that will help you. I have written a bit about the differences of Logbook Loans and Payday loan's, remember neither of these may be right for you or they could be exactly what you need, just make sure to do your research before you accept. 

Logbook loans are a secured loan. When you accept to take out a logbook loan an agent will ask you to sign a 'bill of sale' where the lenders will take the logbook/V5 and keep hold of this until you have paid back your loan in full. They will then safely return the document to you at the end of the loan period.

You will be able to keep your vehicle providing you stick to the terms and conditions of the agreement. If you fail to keep up with the payments, the documentation you exchanged at the bill of sale will give the lender permission to reposes your vehicle. In order to qualify for a logbook loan you will need to be, over 18 years old, be a UK resident, have a vehicle which is no older then 10 years old unless it is a classic and has some value to it, and you will need to show you have a regular income.  Those who are self employed can also apply.

Once you have chosen a lender do check what you need in order to qualify for a logbook loan. Logbook loan lenders do not check if you have CCJ's or arrears as your vehicle is the only security needed. Providing you meet their criteria they will consider giving you a loan. 

Payday loans are unsecured and unlike the logbook loans they do check your credit history. If you have a low credit score, CCJ's or arrears then you may not be accepted for the loan. Payday loans are intended to help people so they are financially solid until pay day. As it is a short term loan, you will usually have to repay the money you have borrowed by the end of the month in question. 

The amount you can borrow differs too. Logbook loans will lend you anything from 50% up to 70% of the value of your vehicle this can range from £500.00 to £50,000.00. Logbook loan terms usually run for 18 months. Payday loans will lend you anything between £50.00 - £1000.00. You would borrow this type of loan for little emergencies for example, if you had fallen behind on your phone bill or needed minor work done to your vehicle. 

The availability of both these loans are very similar.You can receive the money into your account within hours of making your first enquiries with both loans. For a logbook loan an agent will need to come and see you to confirm the value of your vehicle. Logbook loan companies usually have agents all over the UK and Wales so there is no need to worry about where the company is based. With both loans you can apply on-line and be accepted which can be useful and convenient. 

From experience I would look into this carefully before applying for a loan.  And if you can try to pay back the loan as soon as possible it would we wise to see if the lender you have chosen has early settlement fees if you feel you are able to pay back the loan before it has run its course. 

1 comment:

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