How to Get Better Deal from a Logbook Loan Company

If your credit score is low and makes it difficult to access loans while other alternatives are equally undesirable, think of applying for a logbook loan. Today, there are many logbook loan companies in the UK where people can get a loan against their cars. However, it is important to note that logbook loans have very high-interest rates that at times go as high as 400% APR (annual percentage rate).

If a logbook loan is the only option you have or prefer, this post outlines five main ways of getting the best deal.

Take time to look for an appropriate lender

The most important step when looking for a better logbook loan is starting by selecting an appropriate lender. Take time checking with various lenders, evaluating their policies, and their past operations. This will give you insights of a lender who harasses clients or is very eager to take away the vehicle from the client. Good lenders should be understanding and focus on helping clients clear the loan. To know this, you can also follow past clients’ feedback to find out about their experience with various lenders.

Negotiate for lower APR

Companies offering logbook loans are in business and will go to great length to win clients. You should use this concept to your advantage by drawing a line for negotiation. After researching different companies, note those with lower APR and negotiate with your preferred lender for lower rates. Because the lender does not want you to take business to another company, the chances are a new lower APR will be offered. Even if you need that cash so much, do not demonstrate desperation. Negotiate with vigour and more importantly, demonstrate a willingness to walk away.

Focus on repaying the loan in the shortest time

The longer you take to clear a logbook loan, the higher the interest rates. You should, therefore, repay the loan within the shortest time possible. For example, if you borrow £1000 and repay in 12 months at an APR of 300%, you will be charged an interest of £960. However, you will only pay half (£480) if you clear within six months. This will guarantee you full ownership of the car and freedom to use it as collateral.

Go through every word on the terms and agreement document

Many are the times that people append their signatures to loan agreements without going through the fine print that have additional information about the deal. By reading every section of the agreement, you will be able to note and seek clarification about sections you are uncomfortable with. For example, look for lines or clauses that allow the lender to take away the car within the first few days of late payment. Insist on having offensive sections removed before signing the agreement.

Though a logbook loan is the last alternative to turn to, do not hesitate to review options that can help you get a better deal with lenders. Make sure to argue for lower APR and pay the loan within the shortest time possible to get back full ownership of the vehicle.