Interest rates with logbook loans
6th Apri 2011
If you are interested in securing your car with a lender to gain some credit, it can be a fantastic idea to look in more depth at the interest rates in which you would be paying. The rates which you should anticipate with logbook loans will vary dependent on the car you have and your personal circumstances, with lenders likely to ask for a higher rate of interest if you are perceived to be a high-risk borrower.
If you think that the weekly repayments are manageable but the overall amount which you would have to pay is simply too much, it can be a good idea for you to think about settling early. A lot of the time, logbook loans can be agreed over a duration of months and even years - however, trying to ensure that you make early repayments will reduce the money you pay on top of the amount borrowed substantially. For example, you might be going for a logbook loan which has a term of one year and a half overall - or 78 weeks. As you can imagine, this can mean that you have a significant financial commitment which you will need to satisfy on a weekly basis. If you are working with the lender over the complete period, you could find that you have thousands of pounds worth of interest ahead of you. However, saving a little bit extra money each week on top of the repayments you are making will soon add up, enabling you to make a payment in bulk which will bring you one step closer to concluding your loan. In some circumstances, it will even eliminate your loan completely. If you are keen to find out more about how interest is calculated, it can be worthwhile for you to go onto the website of your lender if they have one. A good logbook loan provider will be entirely transparent, ensuring that you are fully aware of the money which you will be liable to pay once all of the paperwork has been done. Interestingly, going with another secured loan or even short-term credit such as a payday loan can be a bad move if you have the opportunity to pay early. Redemption fees essentially mean that lenders are penalising you for settling your loan before the due date - meaning that the lender ultimately loses the interest which they were expecting form the full term of the loan. Interest rates can rise into thousands of percentage points for other forms of credit. However, logbook loans are different, with a generous APR of approximately 440% in most cases - a substantial reduction over the fees which you might have been anxious to expect. Logbook loans admit that they are not the most inexpensive option, but with esteemed lenders having a good reputation and a strong client base where borrowers have returned time and time again, using such a method to borrow money can be the right way to get back on track with your finances.
Posted in Personal loans