The recent downturns in the economy have left thousands of people finding it more difficult to borrow money. As banks and other traditional forms of borrowing have become more strict with their lending policies, people are looking for other ways to borrow, and logbook loans are fast becoming one of the most popular. So, compared to a standard bank loan, could a logbook loan offer the affordability you need?
With a multitude of reasons as to why people want to borrow money (excluding mortgages), one thing's for sure, people are still keen to do so. Whether the money is used to fund a home improvement project, a holiday or something else entirely, the need for borrowing is as high as it has ever has been.
Naturally, borrowers want to get a loan with the best deal that suits them. Low interest, low monthly payments and long repayment terms are all at the top of the list. But, it's not always that simple. It's rare to get the best of everything when you borrow larger sums of money and there's always a price to pay, no matter how good the deal.
For a long time, a traditional bank loan was the standard option when you needed to fund a project or a purchase. As an existing customer, your bank was well placed to be able to look at your financial history and current status and base your loan request on a number of different factors. But, times have changed. When you need fast cash, alternative methods of borrowing are now more readily available and banks are slipping down the pecking order.
Fast Loans, Your money in 24 hours. Or less?
As life moves towards an era where we look to get things almost instantly, borrowing money is no different. Whatever we need to use a loan for, we like to be able to get the money as soon as we can. Hopefully, without having to wait for decisions to be made or waiting for the money itself to be transferred.
With the introduction of online banking and same-day payments, the money lending world has come on leaps and bounds from where it used to be. Decisions about you and your loan are made almost instantly and once approved, money can be transferred to your bank account just as fast. So in terms of getting your money quickly, lenders have taken big steps to keep up with our appetite for fast cash.
High street and online banks have also made great improvements to the speed at which their approved loans are paid out. Yet, more often than not, they still fall short in terms of transfer speed compared to other lending outlets. Many typical approved bank loans are paid within 24 hours, but this is a long time when other lenders are usually able to pay out in an hour - sometimes even quicker.
But after money transfer speeds, perhaps the one area that people are most concerned with is the overall cost of the loan itself. Ask yourself questions like; How much interest do I pay? Will I incur any charges? and Can I afford it in the long term? This is an area where we may not seek out the most attractive rate, but should look at the overall picture and consider the affordability of the loan from week to week.
Affordability is the key
Of course, it's a great feeling when your loan money is ready and available. Knowing that your expenses are paid for can feel like a weight has been lifted. However, getting your money is only the start of the journey and the repayments process should never be overlooked or underestimated in terms of what you need to pay back each week or month.
Many lenders are keen to tie you into a more short-term loan deal at a higher rate of interest. Shorter repayment lengths will lead to higher repayments. This makes sense, should you be earning a good wage and want to clear the debt as quickly as possible. However, some people aren't as well off financially, so tying yourself into a short length, a high-cost loan could be an expensive mistake.
Working out a financial plan is key to the success of paying off your loan in its entirety. When you're looking into loans to suit you, rather than getting hung up over interest rates on face value, look at the overall cost of the loan, including any fees or charges, and what that means to you in terms of week by week money you need to find for your repayment. Remember, it's not how much you can borrow, it's how much you have to pay back in total that's the key.
Fees or charges should be clearly stated when you undertake any loan. If they're not, or if they're not obvious, asking the loan provider what they are will help build a clearer picture of what you'll be liable to pay. More often than not, early settlement fees are also applicable should you find yourself in a position where you're able to do so. To let you finish your loan early, certain lenders could charge the equivalent to a 2-month chunk of interest which can only add to your costs.
As we said, it's not how much you can actually borrow that you should be looking at, but rather the total sum of money that needs to be repaid. A responsible lender will make you aware of this and other fees or charges that might be applicable. They'll also work with you to find a repayment plan that suits you and your finances.
Looking into all these factors could mean a far more pleasant experience in paying back your loan, but one final item to consider when looking to a bank for the money is your credit history. Many bank loans rigorously check everyone's credit history upon application to evaluate whether you're deemed creditworthy or not.
If you've had credit problems in the past, have a CCJ against you or are currently bankrupt, all these things could work against you in your application. Even if the bank considers you for a loan, your past could mean that you end up with a worse rate, meaning higher interest and therefore higher repayments and potentially, a financial struggle.
However, recognising the week to week affordability of paying back your loan is still the key to successfully handling your loan.
Is a logbook loan the answer?
With so many aspects to consider when looking for a loan, it can all be quite confusing. Depending on your circumstances, you might get a better rate of interest with a standard bank loan, but would that be detrimental to your financial ability to paying it back quicker? One answer to all these potential problems is taking out a loan with Car Cash Point.
There's no secret to how our process works and it's really very simple. If you own your own car outright and it's free from finance, we'll help you withdraw the cash held in its value to put towards your purchase - whatever that might be.
You can start the simple application process by submitting our quick loan application or calling 0333 220 4419. Our expert staff will talk you through the entire process and you can ask questions about anything that appears unclear or that you're not sure about. As a responsible lender, this is also the part where we'll tell you upfront that Car Cash Point have no hidden fees or charges. Ever. And that includes early settlement fees.
And once your loan is approved, you won't have to wait for your funds. Unlike bank loans who can take up to 24 hours to transfer your money, we say "why wait?". All our approved loans are paid out and transferred to your bank account within one hour, usually within minutes.
While you're discussing your loan with our advisors, they'll work with you to make sure you have a repayment plan that you're comfortable with and suits your own finances. Your payments are weekly but can be monthly depending on your circumstances, so will always come within your budget and your affordability scale.
And what's more, we won't be making any formal credit checks on you. Unlike other logbook loan providers, we don't require these checks. All our loans are based on using your car as security for the life of the loan. And what's more, you can still use the car day to day like you normally would.
Taking all this into account, Car Cash Point will still never be beaten on price. We're the UK's cheapest and best value logbook loan provider, so if you find a lower rate logbook loan elsewhere, we'll beat the price by 10% - guaranteed!
If you're thinking of taking a loan to help pay for something urgent or just to treat yourself, try and consider all these facts. Looking at the overall cost of your loan and the affordability of paying it back will help you in the long run.
So, for a logbook loan from £500 up to £100,000 and repayable over a period that suits both you and us, keep your affordability in check and call Car Cash Point on 0333 220 4419 today or fill in our quick application form at the top of the page.