If you suffer from bad credit, you’ve probably heard of a logbook loan. This is a type of secured loan in the UK wherein the borrower’s car is used as collateral against the borrowed money and does not involve any credit checks. Despite its availability to bad credit borrowers, however, logbook loans are notorious for their interest rates. These are some tips you can follow to save a little money when you’re in a dead-end situation and logbook loan is your only choice.
Borrow only what you need. A great tip to live by whenever you’re borrowing anything is to borrow only the amount that you need. Sometimes, you might think that it is necessary to give an allowance for something else that you might need. However, this allowance might turn to something that is really unnecessary. After paying for the urgent matter you needed the loan for, it’s quite easy to pass by your favorite store, see the extra cash in your wallet, and spend it right there and then. Remember that this extra cash you borrowed will earn interest, and the more you borrow, the higher interest you will be charged.
Make sure your car is insured. While you can keep the car under a logbook loan, you will still be responsible for any damages and repairs it sustains during the loan period. Having your car insured can provide that needed coverage in case you got into an accident. It can prevent strapping you off more cash when you’re already tight, and you can avoid the need to borrow again.
Do not stretch your payment duration. A common mistake borrowers make is to prolong the length of time before they are to pay off the loan in full. In doing this, you are exposing yourself to accumulating more interests in the long run. While it is certainly necessary to consider what you can afford to pay each month, setting it to the lowest minimum amount possible doesn’t teach you to reduce your expenses. Besides, the longer you are tied to debt repayments, the longer it takes before you can start getting back on track with your budget.
Pay on time. The importance of paying on time couldn’t be reiterated enough in every debt you have. Making late payments, especially in your logbook loan, can acquire very expensive charges. Being on time with your payments not only saves you from these charges, but it can also give your credit score a little boost. You shouldn’t look at your logbook loan as an easy way to obtain cash despite your poor credit, but rather an opportunity to start rebuilding the credit that you ruined.
Shop around. You can find many logbook loan lenders in the UK, and like most companies providing the same service, they are not exactly identical. Sure the interest rates may be in the same range, but you certainly will find some differences in the terms. It pays to know what you are getting into no matter how urgent you need the money. Even if your credit is bad, never think that you are in no position to negotiate. Always ask questions and clarify your doubts, and since there are many lenders out there, don’t hesitate to pay the next building a visit. http://www.eaffylogbookloans.uk
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