You may be at a point when you feel that a logbook loan is your only option. You may fit all of the criteria for a loan and have been offered the sum of money that you need, but you need to think through this important decision.
You need to be sure that you can make the monthly repayments for the full term of the loan. Make sure that you are aware of how much these will be. Think about where you will get the money to pay for them. Imagine you owe £200 a month. You may decide to change to a cheaper phone contract, reduce your television viewing options, cut your children’s pocket money, give up smoking, go out less, but no new clothes and spend less on gifts to be able to afford it. You need to make sure that whatever plan you have in place is realistic and manageable. Will you be able to make all of those financial cuts. What if you cannot cut one of them in a certain month, have you got a backup plan? What happens when Christmas comes and you have to spend extra money on gifts and food? What happens if you have other expenses that go up, how will you afford them?
Most people who need a loan have very little or no money left at the end of each month. If they did, they would be saving it and could use their savings for emergencies rather having to get a loan. This means that if you are short of money, then you will have nothing to fall back on. This can be very difficult.
You may decide that you will be able to miss a repayment or renegotiate your repayment terms. You could do this, but it will end up costing you a lot more money and so it is worth bearing this in mind. If you think that you will struggle to make the repayments, then it is best not to take out the loan at all. You will be better off selling the vehicle you would use as collateral because not keeping up the repayments will lead to it being repossessed anyway.
So in conclusion, never take a loan if you have any doubt about how you will cover the cost of it. If you do, in these circumstances, you will end up worse off.