Getting a logbook loan when you are in a bad spot financially, is already a recipe for success. However, with the high interest rates a logbook loan offers, (reasonable as it is offered to individuals with already bad credit scores), it is important that you as a borrower follow the following tips strictly to ensure you have a successful experience with your logbook loan.
Borrow only as much as you need
When borrowing, using any kind of loan offer, a rule of thumb to live by is to borrow only as much as you need at that time. Borrowing simply because you have an opportunity to will only lead you to great debt. As a rule, you should only borrow when you absolutely need to, and then again, only as much as you need. Borrowing “just in case” is a bad way to live your financial life and can only lead you to misery. You may be wondering how: Any amount of money you borrow, irrespective of its purpose or how much of it you have used, will begin to gather interest from the very second it leaves the lender for your pocket or account. The more extra cash you borrow, the more extra interest you will accrue. When borrowing on your vehicle logbook, ensure you take only as much as you can chew (pay back) within the set time limits.
Pay on time
The first step to accruing debt is to miss your repayments. Making late payments or missing payments altogether can lead to expensive charges on your loan, which will only make the money you owe increase all the more. Not only does paying on time save you from these terrible charges, but you can also boost your credit score at the same time.
While considering payment time, also ensure you opt for an early repayment on your logbook loan. the reason for this is simple. The longer it takes you to repay your loan, the more interest and charges you are likely to accrue over time. Ensure you consider how much you are paying, how much you make a month and look for the maximum value you can afford to pay each month and set it as your monthly repayment. This will enable you to pay off your debt as soon as possible.
Insure your car
Logbook loans are taken against the vehicle particulars (logbook) of the borrower. This means that while the lender owns the right to seize the vehicle should the borrower default in payments, ownership of the vehicle is still retained by the owner (borrower). This means that if your vehicle should incur any damages or faults in the period of the loan the duty falls to you to repay it. Ensure you insure your vehicle then so as to avoid having to pay steep amounts from your pockets (or heavens forbid, having to take out another loan) if you have severe damages.
Finally, there are a lot of options for logbook loans in the market. Do not get stuck on one option simply because you are afraid that you would not find another. Keep your eyes and ears open and do not hesitate to walk away from a deal that is not favourable to you.