In the early days of capital oriented societies people did not have many places to go in order to obtain money or goods they did not have. Even in the ancient times BC, people sold themselves as temporary slaves, to further the prosperity of their own family and on the other hand, more than a few were sold as slaves, if they were unable to pay their debt. Pawning something of value has always been one of the most common practices for obtaining monetary or other riches and not much has changed since then. Logbook loan is also based on a century old law and it is currently one of the fastest ways to gain fast cash in times of need.
The item of value that is securing that loan is your car, or rather, the log book, which defines the owner of the car. See, instead of selling your car in order to get money you just place the actual ownership of the vehicle into your creditor’s hands, all the while driving the car and enjoying the benefits of the car as when it was your own. After you have paid of your debt, the ownership of the automobile reverts back to you and all is well. As long as this scenario plays out as described, there is no problem arising. Unfortunately, whenever money is involved, problems are not far away.
Nevertheless, the best feature of the logbook loan is the ease, with which you can get one. All you need is a car to your name – well, it should be in as good condition as possible – and no claims, or debts, that precede the pawning rights. You walk into one of them stores, most places that provide payday loans and check cashing services also do logbook loans, and in about fifteen minutes you may already get approved. Besides the mentioned payday loans, this is the fastest way to get money there is and you really do not have to do much. This is also one of the most common reasons why many people choose to get a logbook loan, instead going to their home bank and apply for a personal loan. A personal loan may take weeks to clear.
The largest number of people who prefer logbook loans, though, are people with a bad credit rating. While a successfully obtained and properly paid back logbook loan may be the first step towards repairing your credit rating, very often people use a logbook loan just to settle other debts that are more pressing. Such solutions never fare well and are generally the reason why logbook loans are considered bad decisions, besides the often unreasonable APRs.
However, logbook loan places are receiving more and more business, despite the controversy surrounding the whole sector. It may come as a surprise that an increasing number of so-called mainstream banking businesses are either considering or already offering similarly structured loans, some of which even use the commonly associated colloquial phrase “logbook loan” in their advertising. The upside is that the APRs there are way more reasonable, the downside being their stern screening procedure.