The two sides of Logbook loans

Mention the word logbook loans and you will immediately notice a sparkle in the eyes of those with a poor credit rating, a history of defaults or those with a history of CCJ. Of course, the reason for this is obvious. For the longest time, having a poor credit rating was vindictive so to speak. Lenders and mobile phone contract providers treated those with a poor credit rating with disdain. They despised them and saw them as a great risk to business. Applying for a loan or even a mobile phone contract became a nightmare of sorts.

Individuals were frustrated to an extent that they simply wanted to pull off their hair. The “sorry we cannot approve your loan” became a common phrase and applying for a loan a nightmare so to speak. It was common to see individuals with a poor credit rating cross their fingers and hope for the best whenever they needed a loan urgently. The assurance of approval was a non-existent phenomenon; an impossibility so to speak. Then came the unveiling of logbook loans and the loan landscape changed forever. In an exciting twist of fate, having bad credit was no longer an indictment on a person’s personality and neither was it a measure of a person’s financial responsibility nor a discriminatory tool.

Those with a poor credit finally got reprieve and for the first time felt as equals with those with a healthy credit history. Application for a logbook loan was a walk in the park. With credit scores taking a back seat, getting the much needed funds during emergencies was such a delight not to mention hassle free. In addition to that, the idea that a person could apply for a loan up to 70% of their cars official trade value was indeed the stuff that fairy tales are made of.

Logbook loans had indeed changed life as people new them and their sudden rise to popularity was testimony to the fact that it was an idea whose time had come. However, amidst all the excitement logbook loans generated, it soon became apparent that the burden of applying for logbook loans was equally heavy if not depressing. High interest rates were indeed a downside and something that most people found repugnant. Individuals could end up repaying more than twice the principal amount. On the other hand, the risk of repossession was a reality especially if a person failed to meet their repayment obligations over a prolonged period of time. Indeed, we can say without any fear of contradiction that logbook loans are a necessary evil.