With the economic climate in such a poor state, there have been rising numbers of people seeking out alternative lenders. Traditionally this has meant a payday loan, the high interest loans that have been heavily criticised for being too easily accessible without adequate credit checks undertaken.
More recently, ‘Logbook Loans’ have become popular; the high interest lenders that secure a loan against the value of your car.
Missing a payment towards a log book loan is much more problematic then missing a payment towards a payday loan as your car can be repossessed. If you need your car for work this could then jeopardise your earnings and start a horrid decline.
These loans have a high-interest rate and typically charge between 356% to 491% APR. This does not sound so bad compared to the pay day loans where interest rates start at 1,900 APR. However, the logbook loans tend to be over a longer period. Borrowing £800 over 18 months at a typical APR 464.4% could cost a £134.11 a month – a whopping total of £2,413.98 is what you will repay.
These loans are also targeted at individuals with poor credit who cannot get loans at reasonable interest rates. Many of the potential logbook loan customers will already be struggling with a level of debt they cannot afford. Borrowing high cost loans to sort debt it not a good move especially as there are workable solutions to resolve debt issues including debt management and Individual Voluntary Arrangements.
If you are struggling with debt issues and don’t know where to turn, The Debt Advisor have a helpful team of advisors who can help you find the right solution. All debt solutions have pros and cons and so it is really important that you speak to properly regulated practice. The Debt Advisor is a trade member of The Debt Resolution Forum and are regulated by The Financial Conduct Authority no 60669. You can contact us on our freephone 0800 085 1825 or 0161 868 2500 (if calling from a mobile) or visit our websiteswww.thedebtadvisor.co.uk and www.thebusinessdebtadvisor.co.uk