A couple of years back, some smart businessperson dug out an old law regarding the bill of sales and misappropriated it due to a loophole in the law to money lending with a car as collateral, or rather the car’s logbook. The premise was good, since that the person getting the money would also keep the car, for as long as he or she would continue paying. Naturally, since that a centuries old law is very inappropriate for current times, where people actually do have rights, the bill of sales provisions were abused more than used and the government stepped in to regulate.
Nowadays the logbook loan business is more legit than ever, yet people are still wary because of the bad word of mouth and the ridiculously high APRs. Some poor souls still take out these loans, because they have the impression to have hit rock bottom and see no other way out. Some people have good reasons for taking out such a loan, mainly because they have a bad credit history. Yet it is still better to think about other options, before taking out a logbook loan, if for no other reason, but to avoid paying the unacceptably high representative APRs.
Logbook loan lenders thrive on the principle that most people will rather opt for a fast and easy solution, than go on about a long and tiresome, but multiple times more favourable solution that will not only bring money, but be affordable and a long term solution as well. Even you, dear reader, glazed over the second part of the last sentence. So, people take out a logbook loan, because it is easy and because they get the money now and keep the car. That they will end up paying up to five times the amount they borrowed is an information that does not penetrate into the conscious mind at any point.
If you are certain that you can repay that loan without trouble and that there is no other way how you can get that money, then it is understandable that you opt for this logbook loan. Yet, make sure that you shorten the payback time as far as you can and that you only take as much money as you truly need. The less you take out, the less you have to pay back, the shorter the time span, the smaller the chance you make a mistake and the smaller the impact of the APR.