Assuming you have exhausted all your options to borrow money, and have decided to finally release the cash from your vehicle, the next thing to do is make sure your loan will not cost you an arm and a leg. Here are some tips on how to find the most competitive logbook loan deal.
Use Comparison Websites
There’s a good reason comparison websites exist – they give you easy access to the most competitive loans in the market without ever having to leave your home. While these websites certainly do earn a commission for every successful deal they close on your behalf, there’s a bigger chance for you to get the best rates through them as compared to applying directly.
Another advantage with using comparison websites is that you can easily find an online logbook loan that is tailored to meet your needs. You don’t need to visit every lender’s brick or mortar store or even their official website. You just have to key in how much you need and the comparison site will do the work for you.
Check the Company’s Reputation
Even if a comparison website already found a lender for you, you may want to be extra cautious by checking the company’s reputation. There are a lot of unbiased review sites out there where you can gain valuable insights from other borrowers. Most of them are very helpful and would warn others about the companies to avoid.
Study the Loan’s Terms
Once you have the right lender in mind, it’s wise to check the terms very carefully. While the APR could be the most important factor in your loan, your decision should not be based solely on it. You may want to consider the duration of the loan, the late payment fees, and early repayment fees. While every borrower thinks they will never default, it’s hard to tell what may happen in the future, so you may actually be thankful for considering lower late payment charges.
Borrow Only What You Need
Bigger loans take longer to pay off, and the longer the loan stands, the more you’ll pay in interest. There’s also the risk of spending the money elsewhere if you borrow more than what you really need.
Even if you think you’ve got a reasonable offer in front of you, it would not hurt to negotiate a bit further. While there’s no guarantee you’ll be given a lower interest rate, many reputable lenders go out of their way to make repayments easy for you, such as allowing early repayments or giving grace periods.
Lastly, it’s important to remember what you can afford. We will not lie about this part. Logbook loans are expensive, and there’s always the danger to lose your car if you fail to hold on to your end of the bargain. If things are already tough as it is, always consider what you can afford to spend in repayments and set your loan period based on that.
The challenge with buying a car isn’t about finding the right model as it is about knowing how to pay for it. When it comes to paying for your new ride, there are plenty of options available to you. Choosing the right payment method is important, so weigh your options well and take time to think it all through.
Here are some of the more popular ways to pay for your car.
Buying a car with cash is one of, if not the most cost-effective, ways to pay for a new car. Paying with cash keeps you from having to worry about monthly instalments.
Taking out a personal loan from a bank or other similar establishments allow you to spread the cost of your vehicle over a period of time. This payment method allows you to own your new car off the bat, but getting approved for a personal loan can be difficult if you have a bad credit rating.
This payment method requires you to make an initial deposit of around 10% of the total cost, then a series of monthly instalments spread over an agreed period. Unlike with personal loans, the car isn’t yours until the final payment is made.
Think of car leasing as long-term rental. With this method, you make fixed monthly payments to use the car until the lease expires. There are two main types of car leasing: Personal Contract Hire, or PCH, and Personal Contract Purchase, or PCP. With PCH, you’ll never own the car, whereas with PCP, you have the option to make a balloon payment that essentially transfers ownership of the vehicle to you.
Other Payment Methods
Credit Card Payment
Using your credit card to pay for your car, whether partially or in full, gives you added protection on the full purchase cost. That is, as long as you pay a minimum of £100 via credit card, and you meet all of your monthly card payments.
This is similar to personal loans but instead of borrowing money from a bank, you get the loan from friends and family, or from individuals through websites such as Zopa. While peer-to-peer loans don’t go through traditional financial institutions, you still need to have a good credit score.