Logbook Loans vs. Other Loans

While logbook loans may be bombarded with controversies from to time to time, the financial product continues to gain increasing popularity in the UK nonetheless. It is particularly a very attractive option for people dealing with bad credit. Since most logbook loan lenders do not run credit checks, approval is quick enough making the product absolutely ideal for immediate financial problems. It is not, however, always the best option for everyone.
To know if taking a logbook loan is best for your needs, you can compare the product with other personal loan types available in the market.

Logbook Loans

To start, let's get to know logbook loans. As the name suggests, logbook loans are designed for people who owns a vehicle. Even if you have bad credit and have been refused a loan elsewhere, you can apply for the loan provided that you have a car to serve as security or collateral.
With logbook loans, you can borrow between £500 and £50,000 for a variety of purposes. The loan amount can be repaid between 3 months and 5 years depending on your preference. In terms of cost, the average Representative APR for logbook loans is at about 400%. It is certainly higher than guarantor and homeowner's loans but it is also significantly lower than payday loans.

Homeowner's Loans

Homeowner's loans, on one hand, are designed for people who own their house. Just like with logbook loans, the financial product requires a security or collateral, the house in this case. Unlike logbook loans, however, homeowner's loans are more flexible offering loan amounts from £7,500 up to £200,000 or more depending on the asset's value.
Since the amounts are larger, repayment terms are also more flexible. Loans can be repaid from 3 years to 25 years. As for the interest rate, it can be somewhere from 4.6% up to 7%. To compare the available homeowner’s loan online, head over to Money Super Market

Guarantor Loans

If you don't own your home and a car to serve as security, the next option to look at is a guarantor loan. Guarantor loans are unsecured personal loans that require a guarantor to co-sign the application. This is another ideal option for people with bad credit.
As long as you can find a guarantor with good credit and who is willing to back up your application, you can apply for amounts from £500 up to £7,500 payable in 12 to 36 months. The average Representative APR for the loan is at around 50% making the financial product one of the cheapest options available for people with bad credit.

Payday Loans

Another quick fix loan option that's also been making waves online is payday loans. Payday loans are unsecured personal loans that allow you to borrow from £100 up to £1,000. The typical repayment term is 28 days or basically on your next pay check. Some offers, however, allow you to repay up to 3 months or longer depending on your lender.
With no credit checks in the picture, payday loans are ideal for people with bad credit. It is a viable quick fix solution to immediate financial problems less than £1,000. While convenient, the Representative APR is pretty hefty averaging at around 1,000%.