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Jun 05

Payday loans or logbook loans - Which one is the right option for you?

Posted by:AutoMoney

Unexpected expenses can make life difficult for those who don’t have savings. Consequently, many people find themselves turning to a loan as the only solution. However, the good news is that there is a wealth of different loan options to choose from nowadays. If you are looking for a short term solution then two options are payday loans and logbook loans.

A payday loan is one that provides a small sum of money for several weeks – essentially to tide you over until payday. However, a logbook loan is secured against your vehicle; consequently you will usually be able to borrow up to seventy per cent of your car’s worth. The lender does not take your car. They only have the right to do this if you fail to make the repayments you have agreed to.

So, now you know a bit about each loan, but which one is the right one for you? Essentially it all depends on your circumstances – how much money you need to borrow and how long for. If you merely need to pay a phone bill and you don’t have enough money until payday, opt for a payday loan. However, if you require something with greater flexibility you could consider for a logbook loan.

Logbook loans are generally favoured because they allow individuals to borrow a greater amount of money for a longer period of time. Most lenders will allow you to borrow up to £5,000, or more, depending on your vehicle’s worth, and you can borrow this money for a period of up to two years if you wish (depending on the lender). Thus, if you are not one hundred per cent certain you can find the money over the next few weeks, you should definitely consider a logbook loan rather than a payday loan.

Once you have decided what loan to go for, the only thing left to do is find the ideal lender for you. Make sure you find someone with a great deal of experience and a good reputation in the industry. Moreover, don’t forget to read every single word of the contract. You don’t want to end up penalised because of hidden terms and conditions.

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350.5%APR Representative
Representative example: Loan amount £1000. Duration 18 months. Repayable by 16 monthly repayments of £170.42 and one of £198.42 (includes Bill of Sale registration fee of £28) commencing two months from the date of the loan. Total amount repayable £2925.14. Rate of interest 187% per annum fixed. Representative 350.5%APR. LOANS ARE SECURED ON YOUR CAR. The vehicle may be repossessed if you do not keep up the repayments.