Pros and Cons of a Logbook Loan

Like other personal loans, logbook loans have their pros and cons. If you’re planning to apply for a logbook loan anytime soon, weighing these pros and cons will help you make a smart decision. Here are the financial product’s pros and con at a glance:

Logbook Loan Pros

1. Available online – If convenience is what you’re looking for, logbook loans are available online. You can simply complete the online form for a quick quote and for the initial application.

2. Fast approval –Logbook loans are also super fast to get approved for. In fact, many lenders are now promising same day approval to cater to more customers who need a quick fix solution to their financial problems.

3. No credit check needed – With logbook loans there is no credit check to worry about. This means that you can still apply even with a bad credit score and even if other major lenders have refused you a personal loan before.

4. Large loan amounts –With a security involved, logbook loan lenders are able to offer larger loan amounts. In fact, you can borrow up to 70% of your car’s official trade value.

Logbook Loan Cons

1. High cost –With no credit check required, logbook loans unfortunately come with a high interest rate to compensate for the high risks lenders are taking. Typically, logbook loan deals are advertised with a high representative APR of 400%, which basically covers your loan’s annual interest rates, administration fees and other related charges.

2. Repossession –Because the loan is secured against your vehicle, there’s also the possibility of vehicle repossession. As agreed upon prior to approval, you allow lender to repossess your vehicle in the event that you fail to make monthly repayments. The lender can then sell your vehicle to cover for your outstanding balance.