In as much as logbook loans have given bad credit UK citizens a new lease of life as regards availing of loans, it is essential for such people to exercise caution when applying for a V5 loan. The fact that you can be accepted even if you have a poor credit rating should not make you blind or spur you on to make uninformed decisions. There are a number of key things that you should be conversant with prior to applying for a v5 loan.
Cost of the loan
Prior to applying for a v5 loan, ensure that you know the total cost of the loan. The total cost of the loan is usually calculated using the annual percentage rate. On average, most logbook loans have an APR of 400%. You need to compare and contrast different logbook loan lenders and ensure that you go for a v5 loan that is most affordable.
Mode of repayment
Don’t be too excited to avail a logbook loan as to give the idea of the mode of repayment a wide berth. It is important that you avail a logbook loan with a lender that gives you diverse modes of repayment. Additionally, the time of repayment should also be reasonable and agreeable to you. For instance, there are lenders that insist for weekly repayments while others are diverse and give you the option of whether to repay weekly, biweekly or even monthly. On the same wavelength, some lenders insist on making use of collection agents while others give you a free hand to choose whatever mode of repayment you are comfortable with. Ensure you take this into consideration prior to applying for a logbook loan.
Circumstances under which your car might be repossessed
By now, you know that the greatest risk of applying for a logbook loan is the possibility of car repossession when you are unable to repay the loan. However, there are rogue logbook loan lenders that are quick to repossess your car after a missed payment or two while there are others that work out a plan that can help you repay your loan comfortably should you encounter any problems. Ask these questions before applying for a logbook loan and you won’t encounter any problems.