Logbook Loans

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A logbook loan is simply a loan secured on car or vehicle. Your vehicle is therefore held as collateral when securing such a loan. It’s an elegant solution to those with bad credit hoping to get some quick cash. Unlike many other lending avenues, a bad credit rating isn’t much of an issue, so you won’t be disqualified even when you’ve got a tainted credit score. With your car present, there is a tangible security, and this goes a long way in minimizing the risk for the lender.

How they work.

Logbook loans are based on the premise of vehicles being used as security. This means that the lender legally owns your vehicle for the duration of the loan. However, you will still retain the vehicle in your possession. This is made possible by the Bill of Sale. It is the document that transfers ownership of the vehicle to the lender, and it has to be signed before the loan is in effect. The lender can therefore repossess your vehicle once you fail to pay your loan. The V5 logbook, after which the loan is named, has nothing to do with legal ownership of the vehicle. It is typically taken by the lender for the loan’s duration as a symbol of transfer of ownership. However, the details in the document remain yours and show you as the registered keeper of the vehicle. Once you pay back your loan, it’s returned unchanged.

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The amount you can borrow varies from £500 to £50,000. This amount depends on a number of factors such as your vehicle’s value and your income. For instance, having an old car with a relatively low monthly income will mean you can’t borrow much. In many cases, you are only allowed to borrow a value up to 50% of you vehicle’s trade value.

Considerations before applying for a logbook loan.

Logbook loans can be very costly if you don’t know what you are doing. Although they generally offer high amounts compared to unsecured loans, the high interest rates and the risk of repossessing of your vehicle mean you could end up paying a lot. The market APR for logbook loans is quite high, averaging at around 400%. Therefore, before securing a loan, try looking around for lenders with lower APRs. Also, check the contract and ensure it’s compatible with your payment plan. Some lenders charge early repayment fees if you decide to clear your debts earlier than stipulated. Avoid them if you plan on repaying your debt quickly. Additionally, seek lenders with the best reputation since some may be fraudulent or unscrupulous.

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Requirements for logbook loans.

In the U.K, you’re only eligible for logbook loan application once you have met a number of conditions. You must be a resident of the UK and 18 years old and above. You must also supply relevant identification such as a passport. Proof of income such as pay slips are crucial to give an idea of your ability to pay the loan. You must also own a vehicle and the pertinent logbook. Take steps to ensure that the vehicle is free from any pending payments. Vehicle insurance documents and the MOT are also paramount.

How to pay your bills on time

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Many problems or projects in your personal and professional life may demand your attention. On a sufficiently busy schedule, you could therefore find yourself opting to pay your bills ‘just a bit later’. While a late payment in itself isn’t a big deal, making a habit of late or missed repayments can cause a lot of damage on your credit score. This means that you have to pay huge amount of interest any time you request for a loan. Paying your bills on time is therefore a sure way of saving your money and keeping yourself clear of bad credit. Here are some tips to help you pay your bills promptly.

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Organize your bills.

Choose a good spot to keep your bills once you receive them. Pick a safe place that is inaccessible to unauthorised people or children. However, make sure that you can easily remember their location when the time comes. This will allow you to keep track of your bills and avoid misplacement. Remember to arrange them chronologically and in terms of relevance. Doing so is a sure way of helping you clear the most important bills and those closest to their due quickly.

Scrutinize your bills before paying.

Whenever you receive your bills, always cross-check them with previous payments and statements for mistakes. Alternatively, set aside some time during the month to go over your bills. Look for any unprecedented rises and falls in the amount payable. Contact the companies or lenders involved to correct the mistake so that you can avoid paying for incorrect charges.

Choose a good payment method.

There are many methods you can use to pay your bills. Direct debit and online banking offer efficient means of paying your bills on time. Direct debit allows you to pay your bills automatically, and many lenders offer discounts when you choose this option. Online banking allows for reliable banking with convenient online reminders of when your bills are due.

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Ensure you leave enough money to clear bills.

When saving for or buying large purchases such as houses, many people often forget about their bills only to receive a rude reminder when they are due. Before planning on any other purchases, set aside enough money to clear your outstanding bills. If you are unable to do this, at least ensure you always have enough to take care of the most immediate bills as you give yourself time to pay the others

Adjust your due dates.

Having all your bills come in around the same time could make them much harder to pay. Some accounts allow you to choose the most convenient time for payments. If given the option, try to have you bills arrive as the month begins when your financial reserves are still robust. Alternatively, you could spread them across varying dates in the month to even out the burden.

Expert tips to help improve your credit rating.

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Having a poor credit score could affect your life in innumerable ways. Negotiating a loan from various lenders will become much harder. Furthermore, even if a loan request or any other credit transaction is accepted, you still have to contend with high interest rates. If you aren’t careful, these high interest rates could wreak greater damage on your finances, and worsen your credit rating. Finding ways to improve your credit rating will therefore go a long way to ensure you have a stable financial base, and save you a lot of money down the road. If you find that your credit score is lacking, here are some tips to remedy the situation.

Keep old debt on your credit report.

Some people believe that any kind of debt in their credit report is detrimental to their score. They will therefore strive to remove any traces of debt whenever they pay off their house or loan. This is an erroneous assumption that negatively affects the credit score of many. While negative entries in your credit report are bad for your rating, they will eventually vanish after some years. On the other hand, debts that you have paid back promptly will do wonders for your credit score. Endeavour to leave them in your credit score for as long as possible. A long credit history that shows you pay back your debts will reassure your future lenders.

Pay all bills on time.

Making prompt payments is an absolute necessity when rebuilding your credit score. Defaulting or making late payments on anything from mortgage to electric bills is unwise. It will stay on your credit report for years and greatly impact your credit score. Even when saving for a major purchase like a house, never neglect your monthly bills.  A good idea is to set up a direct debit scheme to reflexively pay the minimum requirement monthly. This is to ensure you don’t forget any payment. You can then top up the amount on your own.

Check your credit report.

Regularly scrutinize your credit report when you are about to request for a loan. Check for any mistakes or discrepancies. You could also be a victim of fraud and have your credit card accessed by unauthorized persons. For any mistakes, challenge them by complaining to the credit reference agency for resolution. Alternatively, contact the lenders responsible for the incorrect entry and rectify the issue. Remember to correct any information that may have been true at some point but is now irrelevant. For instance, if you got a job and you were once unemployed, ensure your credit rating reflects this.

Use a credit-builder card.

Apply for credit-builder cards if you have bad credit. They are generally more expensive than standard credit cards since they consider those with bad credit. However, credit-builder credit cards are a good choice because they offer a way of strengthening your credit score over time. If your credit score is low enough, they may be the only option left as standard credit card companies may decline your request. Remember to make prompt monthly payments to reduce the interest payable and have a positive impact on your credit rating. Failing to do so will put you into greater monetary problems.

 

Ways to reduce your transportation costs.

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High transportation costs don’t necessarily mean that the fuel cost is high. You could be paying a reasonable price for fuel but still find your overall transportation costs are too high for comfort. Even if you own a small vehicle, transportation costs will still consume a big chuck of your monthly income. It is therefore prudent to save money however you can on such a major expense. Here are some tips to help cut down on your transportation costs.

Use public transport.

Public transportation means are a great way of reducing your costs. Not only will you reduce fuel costs when you leave your vehicle at home but also extend the life of your car once you reduce its use. Moreover, you can do this knowing that you are saving your planet. Check out the bus and train routes in your area and decide which is the most convenient. Utilize such means even for just two days of the week, and you will do wonders for your budget.

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Carpooling.

Sharing the fuel costs is an option you should consider when trying to save. Getting into a vehicle as a family and setting up some designated drop-off points for each member is a great solution. This is a great alternative to having the family members leave with multiple cars that will all add up to your fuel costs. Also, when getting to your workplace, you can liaise with your co-workers and friends to organize a way to share a vehicle.

Treat your vehicle with respect.

Keeping your car in good condition will help increase its fuel utilization efficiency and reduce your repair costs for when things go wrong. Vehicle maintenance practices such as checking your tire pressure before a journey or replacing spark plugs when necessary are therefore paramount. It is also a good idea to polish up driving practices that can harm your vehicle. Avoid making sharp breaks and accelerating too rapidly. Additionally, don’t drive too fast. Keeping a low speed average will improve your fuel economy by a large margin.

Stay on top of your car insurance.

Insurance is a major part of your monthly costs. You should therefore take steps to reduce them whenever possible. Re-evaluate your insurance policy any time you make a renewal and see if you can get a better rate. Circumstances may have changed to make the insurance less risky on the part of the insurer. For instance, you may have gotten a new job that pays more or is located nearer your home hence less daily mileage. Also, make sure you aren’t paying for coverage that you don’t need. Don’t forget to constantly compare your current insurance rates with those of other carriers to ensure you aren’t paying more money than necessary.

 

Consider car renting.

If you are in need of a vehicle yet you only plan on using it a few days of the week, turn to car hires. It’s an option that will save you a lot of money instead of buying a new car altogether. Setting up a car rent will ensure you only use a vehicle when in need and avoid the heavy costs incurred when buying a vehicle. Furthermore, you don’t even have to worry about the maintenance costs.

Use a bicycle or walk.

When travelling for short distances, you don’t have to use your vehicle. Opting to use a vehicle for short distances will harm your fuel and energy costs. Instead, use such opportunities to exercise and go for a walk or ride your bicycle to the mall. Other than reducing your transportation costs, you will keep yourself healthy in the long run.