Are you considering taking out a loan against car? You may have been told that there are many benefits associated with this lending solution if you are strapped for cash. However, lending more money and getting into more debt is not always the best idea in the world!
Nevertheless, we can’t deny that many people prefer this type of loan, as it gives them the possibility of borrowing a lot more money than a payday loan does. In addition to this, with so many logbook lenders to choose from, you can find terms and conditions that are suitable.
Nevertheless, similarly to all types of loans, this lending solution is not for everyone. Keeping that in mind, read on to help you determine whether this is the right solution for you…
What is the general eligibility criteria for this type of loan?
First and foremost, let’s begin by discussing the general eligibility criteria for a logbook loan. After all, if you do not meet the requirements put in place, you are better off looking for a different solution.
As this is a loan secured against your vehicle, you will obviously need to be over 18 years of age and you will need to own your car. Your vehicle should be paid in full and you should be up to date on its tax, MOT, and insurance.
In addition to this, you will also have to prove you have the ability to make the repayments. Thus, proof of income, such as payslips, will be required.
These are the general requirements. However, you may find that some lenders ask for more information and other documents. If you meet the outlines that have been put in place, there is every chance that this is the perfect loan for you.
Should you really be borrowing against your car?
The second and final thing you need to assess is whether this type of loan is suited to your situation. In most instances, a logbook lender will give you the possibility of lending up to seventy per cent of your vehicle’s current worth. Therefore, you may have the option of borrowing several thousand pounds.
In addition to this, your repayment period can be anything from six months to two years. Some companies even give you a grace period whereby you need not pay anything back for the first month or two.
However, you really need to question whether getting into debt is a good idea. We are often told that living in debt is “normal” but it’s time we were honest with ourselves and admitted that it isn’t!
Yes, there are situations whereby you may need to borrow some funds, and if you’re not in debt already and you know you can make the repayments, it is understandable.
However, if you are currently in debt, check out DTSS before you make any big decisions on the lending front, as you should be taking steps to get out of debt, rather than getting into more!
We hope that this post has helped you to figure out whether lending against your vehicle is really right for you.