UK logbook loans are getting plenty of exposure in the media at the moment thanks to the fact that more people are using them. With individuals struggling to make ends meet, and many of them having a bad credit rating ratings, it only makes sense that lenders who cater towards them are popping up all over the place to take advantage.
If you are in this situation then you might be tempted to approach one of these companies to see how much money you can get to help you eradicate your financial problems. Unfortunately the truth of the matter is that you can find yourself getting into a lot of trouble if you are unaware of the negative consequences of doing so. Does that mean that you should never use logbook loans? In an ideal world then yes, you should avoid them absolutely, but in reality you might find that sometimes there is just no other place to go when you have to get your hands on some money quickly. But lets take a look at the reasons why you should think carefully about the usefulness of this bad credit product, and why the UK government it attempting to implement a logbook loans ban.
1. Logbook loans incur very high interest rates which ensure that you have to repay much more money than you borrow. These rates are usually well over 400% which means that you are going to have to give back over £4000 for that £1500 loan you just received.
2. High charges. These companies are renowned for putting high charges on your account whenever they get the opportunity. For example, if they have to send you a letter to let you know you are late with a repayment they might stick an extra £50 on the final bill.
3. You could lose your car. The reason the log book loans companies can give so much cash to people with bad credit is because they use your car as collateral. Your vehicle is their insurance that you will repay, and if you don’t they will repossess your vehicle and sell it at auction to recoup the money owed.
Tags: bad credit loans, log book loan, logbook loans ban, UK logbook loans