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Advantages of logbook loans over payday loans

The economic recession of 2008 indeed had ripple effects on how high street banks and mainstream financial lenders approached the subject of advancing loan. The economic downturn experienced back then saw the closure or collapse of various financial institutions and the resultant effect was that a majority of banks were not willing to advance credit facilities to individuals especially if they had a poor credit rating. The popularity of payday loans and logbook loans were therefore increased by the unwillingness for banks to advance credit facilities based on their low credit score status.

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Logbook loans and payday loans stepped up to fill the vacuum and by doing so, won over a legion of loyal customers. When we talk about a payday loan, we are basically speaking about a loan scheme secured on a person’s paycheck. What this essentially means is that a payday loan is repaid on the next payday. A logbook loan, on the other hand, refers to a specific type of loan secured against a person’s car logbook (V5 document). Logbook loans enjoyed great popularity because of the fact that they did not dwell on a person’s credit score and required less paperwork. Approval was also done in less than 24 hours which has made it quite popular with UK applicants. That aside, why are logbook loans more suitable than payday loans? Why should a person apply with JustLogbookLoan and give payday loans a wide berth? Let’s shed light on a number of reasons as to why a logbook loan is more suitable than a payday loan.

Logbook loans have lower interest rates compared to payday loans

In essence, payday loans are more or less considered a quick fix but what most people fail to realize is that the loans have higher interest rates as compared to logbook loans. While the average annual percentage rate (APR) for a logbook loan is in the region of 400%, the annual percentage rate for a payday loan is somewhere around 4000% which essentially means that a borrower ends up repaying insane amounts. On the other hand, logbook loans are secured on the value of the car which essentially means that the APR for logbook loans is relatively lower compared to that of a payday loan.

Prolonged loan repayment period

The reality of the matter is that the repayment period for a payday loan is relatively shorter compared to that of a logbook loan. Most of the time, a person is forced to repay the loan on the next payday and defaults only lead to exorbitant penalties and fees further building up on the loan amount. The same cannot be said about logbook loans where a person can flexibly repay the loan for up to a period of 78 weeks. This prolonged period, of course, gives the borrower flexibility to plan out the repayment.

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Access to large sums of money

As earlier stated, payday loans are a quick fix and therefore you are only eligible for a fraction of your paycheck. This might prove disadvantageous especially when you are in need of a large sum of money. The same cannot be said about logbook loans as you can actually get loan amounts up to 70% of the value of your car. With such kind of money, you have leeway to accomplish something bigger with the loan amount than what you would with a meager £1500 maximum payday loan amount.

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Benefits of short term loans

Seeking to apply for a short term loan and in a dilemma as to whether you should go for it or not? Do not worry as life is a total summation of the choices we make and at times we simply need to be pointed in the right direction. Short term loans have indeed helped numerous people get the much needed financial help as and when they need it within a couple of hours. If you are wondering why you need to consider applying for short term loans, we are going to highlight some of the top benefits of applying for them.

Quick access to cash

The outstanding benefit about short term loans has to do with the fact that you get access to the cash you need within a very short period of time. Usually, once your short-term loan has been approved, you can expect to receive the cash mostly within 24 hours. This type of loan is, therefore, instrumental when you are in urgent need of cash in a hurry.

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Leniency regarding your credit history

Your credit history plays a central role especially when you are applying for a long term loan. However, short term loans do not dwell so much on your credit history and tend to be lenient when it comes to it. In other words, you can get approved for a short-term loan provided that you have a steady income and free from any other outstanding loans.

No collateral

Short term loans are mostly unsecured which essentially means that you do not have to pledge security prior to approval. You can, in essence, get approved for a short term loan without having to set up any of your assets as security. What this really mean is that should you default, none of your assets will be at risk. However, you shouldn’t apply for a short term loan with that kind of mentality. It is essential that you meet your loan obligations as lenders can utilize other mechanisms to ensure that they recoup their money when you default in payments.

Flexibility

The beautiful thing about short term loans is that there are many lenders there out willing and ready to work out a flexible arrangement when it comes to repayment. For instance, you can choose to be paying off the interest accrued to the loan monthly and ultimately pay the principal amount as a one-off payment. This flexibility is indeed what attracts many people to short term loans.

No long term commitments

The drawback about long-term loans has to do with the fact that you have to be committed for a prolonged period of time usually lasting a couple of years. The same cannot be said about short term loans as you are just committed to a loan for a couple of months only and ultimately focus on the foreseeable future.

To sum it up, in as much as there are many benefits related to short term loans, there are also a few demerits which include high-interest rates and the fact that defaults lead to high penalties and fees.

 

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How to go about applying for short term loans

Are you currently in some financial distress and in need of an urgent loan? Are you looking for a loan product that will help alleviate your financial problems in the shortest time possible? If the answer to the above is yes, you should consider making an application for a short-term loan. In essence, short term loans refer to the type of loan repayable between 2 weeks and 3 months and are most suitable for individuals who urgently need cash for whatever reason but simply can’t wait till they get their next paycheck. A good example of a short term loan is a payday loan.

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The reality of the matter is that you could never really tell when an emergency will crop up. Unfortunately, most of the emergencies happen when you simply do not have cash with you. Your paycheck could be two weeks away and yet an emergency such as a leaking roof or a car that has broken down simply can’t wait. So what do you do in such circumstances? How do you arrest the situation as you await your payday? You guessed it right. A short term loan could help you sort out your mess within no time. The question now is, how do you apply for a loan such as this?

The beauty about short term loans is that the application procedure is quite simple. You don’t have to deal with complex procedures or a lot of paperwork before you can be approved for one. The first step is to look for a suitable lender. To accomplish this, go online as there are many short term loan lenders in the UK with amazing websites. However, searching for short term loan lenders is not all about doing business with whichever lenders you stumble upon. Ensure that you carry out due diligence. When searching for the right short term loan lenders, find out whether they have been accredited, ascribe to laid down ethical professional conduct in their business dealings, whether they are reliable, truthful and honest just to mention but a few things you should consider.

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The reality of the matter is that there are numerous lenders out there who promise heaven and the earth but they are simply out to swindle customers with high-interest rates and substandard services. For this reason, take your time, do your research and settle on a short term loan lender that is not only legitimate but also has your best interests at heart. Once you have pinpointed or settled on a short term loan lender, the next course of action is to make an application for the amount of money you urgently need. Also be sure to check out whether you meet the requirements outlined by your lender.

In most cases, short term loan lenders require that you be a person of sound mind above the age of 18 years, be in some form of employment (you need to show proof through providing income statements), show proof of address just to mention but a few. The requirements are put in place so that the lender can ascertain that you are capable of repaying the loan. If you meet all the requirements as outlined, your application will be approved and you will receive your money within 24 hours or in certain circumstances 48 hours.  You can choose to have the loan amount deposited in your bank account or you can personally collect it if the lender offers such an arrangement.

In conclusion, short-term loans do come in handy especially when you are desperate for cash and need it urgently. Just ensure that you choose your lender wisely and that you take into consideration factors such as interest rates, ease of application, professionalism, and reputation before you make an application.

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The difference between short term loans and long term loans

In the past, before the advent of the internet, applying for a loan was an involved process. You had to commute to a lender, wait in a line for hours before you could apply for a loan. Add to that the fact that if you didn’t have specific papers you had to go through the painstaking process again and you will appreciate why the internet has indeed positively impacted every aspect of our lives. The internet has brought convenience, simplicity and seamless applications of loans from wherever a person is. In fact, you can apply for a short term loan online, get approved and get access to the loan cash without moving an inch.

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That aside, when we are in need of a loan facility, we have the option to go for a short term loan or a long term loan. The choice we settle for is informed by our needs or aptly put, what we need the loan for. For the purposes of the uninitiated or those considering to apply for a loan for the first time, lets shed light on two types of loans namely long term and short term and what their differences are.

Short term loans

From the sound of the name, this is a loan product designed to be repaid within a short period of time. In essence, a loan that can be repaid within 2 weeks up to 12 months is regarded as a short term loan. This is the kind of loan that you apply for to meet your business current needs, to pay emergency medical fees, school fees, to repair a leaking roof, broken garage door and so on and so forth. The requirements for applying for a short term loan are pretty simple and with the right documentation, you can get access to one within 24 hours. Payday loans are examples of short term loans that have gained popularity owing to the fact that they are secured using a person’s paycheck and issues of credit history do not rear their ugly head.

Long-term loan

Long term loans are indeed the opposite of short-term loans in the sense that they have a longer repayment period based on the purpose for which the loan is required. In essence, a long term loan can be repaid for a period of between one and 30 years. People go for long term loans when they need to accomplish a serious project such as building a home, buying business furniture and fittings, modernization of a business and so on and so forth. Unlike a short term loan which you can avail without collateral, a long-term loan requires that you pledge security before you can be considered for the loan.

The security is simply meant to mitigate the risks on the part of the lender should you at some point down the line be unable to meet your loan repayment. When that happens, the lender will simply sell off your security and recoup their money together with interests. Commercial banks are the ones that ordinarily offer long-term loans to customers. Owing to the fact that long-term loans last for a couple of years, processing of these kinds of loans is a bit involved, complex and prolonged. You, therefore, cannot approach a bank today for a long term loan and expect for it to be approved within 24 hours. Additionally, a borrower needs to have an above average credit score to be considered for a long-term loan.

In light of the above, if you are seeking to apply for a loan, I want to believe that the above distinction has been of help in assisting you to make the right decision. Go for a short term loan when you urgently need cash for a short period of time. However, when you want a huge amount of cash to be repaid after a couple of years, a long term loan is your best bet.

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