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How not to Spend Too Much on Your Logbook Loan?

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Many people are against logbook loans mainly because they are more costly than traditional loans. However, for people with bad credit and in immediate need for money, there’s no other better option than a logbook loan. Still, you should remember that you can avoid paying for too much by following these tips. 

Borrow only the amount you need. With a logbook loan, you can borrow between £500 and £50000 or as much as fifty percent of your vehicle’s worth. However, you don’t always have to maximize the amount you are allowed to borrow. For example, if you only need £500 but you are allowed to borrow up to £5000, stick only to the amount that you need. Chances are the more you borrow, the more likely you are going to spend the money on things you don’t really need, and the higher the amount, the higher interest it will incur.

Don’t be late on your payments. By being late on your payments, the lender can charge you penalties and other fees for sending you letters or calling you in an attempt to collect payments. Not only will you have to make two monthly payments the next time, but you will also have to pay for these other charges. Not to mention that late payments can risk your vehicle for repossession.

Do not stretch out the time for repayments. One good feature of a logbook loan is its flexibility, however, this is one feature that you shouldn’t abuse unless you want to pay more than you have to. Logbook loans are best designed for short-term borrowing, because this is when your costs on interests can be reduced. By borrowing only a small amount and repaying it within a relatively short period, you won’t have to spend too much on interests.

Choose loans without early settlement fees. In relation to above, try to pay off your loan as soon as you can in order to limit the amount you’ll be spending on interests. Look for logbook loans that allow you to settle the debt early without having to pay for early settlement fees, so that when you become more financially stable, you can pay off the loan quickly. The less time the loan is in standing, the lower fees and interest it acquires, and the sooner you can become debt-free.

Make sure you are dealing with a reputable lender. Logbook loan lenders also have a Code of Practice to follow. Make sure that the lender is one that is authorized to conduct businesses in the UK so that you won’t have to be subjected to unfavorable terms. In addition, this can give you and your vehicle legal protection.

Compare between lenders. Not because you have bad credit doesn’t mean that you don’t have the right to shop. Even logbook loan companies have varying offers, and you’ll find some with more suitable terms for your particular situation than the rest. Be sure to inquire about the APRs, terms, and any additional fees.

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