Logbook loans are not only popular among borrowers with poor credit history, but among financial critics as well who are against the loan’s excessive APRs. If you are wondering if a logbook loan is really expensive, well we should honestly say yes. But should a logbook loan cost more than what is necessary? Definitely not! The following are some tips that can help keep the cost of your loan down.
Be Sure to Meet Your Scheduled Pay Dates
Missing your due date even by a day can subject you to late payment fees. This is why we strongly suggest that you take advantage of a logbook loan’s flexible payment scheme. Early on, consider scheduling your payment dates on the day or a few days after you would receive your salary, to ensure that you’ll have the cash when payment time comes. If you’re too broke and have no other choice but to miss your due date, be sure to contact your lender and let them know in advance. Some may be considerate enough to give you extensions, but even if they do not, you can still avoid the fees they would charge when they send you letters and calls.
Pay the Loan Early if Your Lender Allows It
If possible, you might also want to pay the logbook loan early to save costs on interest rates. In this scheme, the interest is calculated based only on the days that the loan went active. While there are lenders who do not allow this, or charge “early payment fees” to do this, there are many lenders who will let you pay off the loan in full without waiting for it to expire. If you’re expecting some amount of cash in the future, it’s wise to inquire early on if the lender would allow you to pay off the loan just in case, because it would not make sense to get out of the loan early when you have excessive fees to pay.
Do not Borrow Too Much
Logbook loans are often associated with high borrowing limits because you can usually release up to 50% of your vehicle’s value. However, just because you can borrow more doesn’t mean that you should indeed borrow more. Keep in mind that the larger the principal amount, the larger your interests will be as well. It would also take you a longer time to finish off with your repayments when you borrowed a huge amount.
Consider where you need the money, and if you really need it. Logbook loans may be used for real financial emergencies, but shouldn’t be regularly depended upon, as it will make it hard for you to get out of debt.
Keep Your Loan Term as Short as Possible
Again, the longer your loan term, the longer time your principal accrues interest. If you don’t want to regret how you paid triple your original loan amount, do not extend your duration too much. The trick here is to put as much money as you can towards your instalments, so you can pay off the loan sooner and get back on track with your finances.
Lastly, it’s important to find a lender that suits your needs and budgets. While logbook loans usually have very similar rates and interests, you will still find that one deal may have lower APR than the other, and have better terms than the rest of the competition. There’s no single best logbook loan lender, only a best lender for your specific loan.
This is where LoanWire comes in. We have all the top lenders listed in our database, which makes it easy for you to narrow down your options and choose the best deal that matches your needs and preferences. We can never say that a particular lender offers the best deal, but since we work with the country’s finest, you can rest assured that grabbing your loan through our comparison service will help you get the most competitive rates.