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A look into Logbook loans benefits

The runaway cases of UK individuals with a poor credit rating getting denied access to loans greatly informed the unveiling of logbook loans. UK citizens with a poor credit rating and in need of an urgent loan found the going tough as majority of high street banks wouldn’t consider them for a loan. Logbook loans were specifically unveiled with bad credit people in mind. A logbook loan is in essence a special type of loan facility where a person’s van, motorcycle or even car is used as collateral. In simple terms, if you legally own a car, you can set it up as collateral and get access to cash without having to worry about credit checks or the status of your credit score. So what are the benefits of applying for logbook loans?

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You do not lose possession of your car

In a logbook loan scenario, you only surrender your car logbook to your lender but keep possession of your car. You therefore can still make use of your car to generate income as you repay your loan. Your daily routine will therefore not be affected when you apply for a logbook loan.

Suitable for emergency loan

If you have bad credit, you will agree with me that your options narrow considerably especially when you are in need of an emergency loan. Your car may have broken down, you may be in need of emergency medical cash. Your garage may need repair urgently and hence the need for an emergency loan. Logbook loans are mostly processed within 24 hours or 48 hours in the latest and therefore suitable when in need of cash urgently.

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No credit checks

Perhaps this is the most outstanding benefit of logbook loans. You don’t need to worry about credit checks when applying for logbook loans. You are free to apply and get approved for a logbook loan irrespective of whether you have a history of CCJ, defaults or arrears. If you want to find out more tips about this, click here.

Eligibility criteria is quite simple and straightforward

To qualify for a logbook loan, you need to be a UK citizen, a person in employment, a person of sound mind, to own a car legally registered in your own name and to be above the legal age of 18 years. Your credit history is not an issue and neither is it a stumbling block.

You borrow what you require

Logbook loans give you the perfect opportunity to borrow exactly what you need based on the official trade value of your car. Most UK logbook loan lenders advance up to 75% of your current car value hence making logbook loans perfect for borrowing the amount of money you need.

Easy to apply and understand

There is nothing rocket science about logbook loans. The model is simple and easy to understand. Application can be done online or from a brick and mortar office and the terminologies are quite easy to grasp. The application process is simple, the requirements are basic and you get access to your cash in the shortest time possible.

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Highlighting the Side effects of having a poor credit rating

You probably are the kind of person who simply have an affinity for maxing out credit cards as well as defaulting on payments. Your ignorance probably has you thinking that such wanton behavior has no side effect on you. Chances are that you are young and feel as if you own the world or that your behavior right now won’t have an impact on your future. Well, it is time for you to smell the coffee as your financial irresponsibility now will haunt you in the future when you want a loan or even a phone contract with favorable terms. In light of this, what are the side effects of having a poor credit rating?

High interest rates on credit cards as well as loans

Having a poor credit rating means that you pose a great risk to lenders due to your history of defaults and as a result you will have to contend with high interest rates every time you apply for a loan, a credit card or even a mobile phone contract.

B7TFJA worried woman on phone checking credit card / bank statement / bills. Image shot 2008. Exact date unknown.

B7TFJA worried woman on phone checking credit card / bank statement / bills. Image shot 2008. Exact date unknown.

High rejection rate

When you have a poor credit rating, you can as well forget about guaranteed approvals when you apply for a loan. What you can be sure of is the high rejection rate from lenders because you are considered a great risk to their success.

High insurance premiums

A poor credit rating means high insurance premiums because of your history with defaults. Insurance companies that individuals with lower credit scores tend to have high claims and as such will always impose high premiums.

Security deposit for a cell phone contract required upfront

The fact that you have a poor credit rating means that it will become difficult to get approved for a phone contract without paying for security upfront. Mobile providers view you as high risk and therefore will require security upfront prior to approval.

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In addition to the above, chances are also high that you will be denied for employment due to having a low credit score, you will encounter problems getting approved for an apartment, encounter problems purchasing a car not to forget incessant calls from debt collectors!

 

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Benefits of having a good credit rating

Granted, it is possible to live with bad. However, what most people can attest to is the fact that having bad credit is in no way cheap or a luxury. It is, bluntly put, a great source of immense stress not to mention the many occasions of missed opportunities. Other than receiving second class treatment when it comes to getting access to credit, having bad credit can seriously injure your reputation, make you feel embarrassed and deny you access to basic credit facilities. For this reason, emphasis has always been on the need for people to strive towards having a good credit rating.

The peace of mind that comes with having a good credit rating is unlike any other. You feel liberated, confident and inadvertently lead a stress free life. If you are the kind of person who is not bothered by the status of your credit rating, you might want to take a look at the benefits of having a good credit rating. Why is it important to have a good credit score? What are some of the underlying benefits of having a good credit score?

Low interest rates on loans and credit cards

The moment you have bad credit, you can be rest assured that lenders view you as a risk and for that reasons, you will have to bore the brunt of high interest rates every time you apply for a loan or a credit card. In simple terms, interest rates refer to the cost of borrowing. The higher the risk to the borrower, the higher the interest rates. Having good credit rating means that you get to enjoy low interest rates on loans and credit cards as lenders view you favorably. The less the amount of money you pay as interest rates, the more money you save to channel on other important financial endeavors not to forget repaying your outstanding loan balance.

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Guaranteed approval

If you have never been in a situation where you have bad credit and in need of an urgent loan, you might not fully comprehend the importance of having a good credit score. Having bad credit is a nightmare especially when seeking to get approved for a loan. Rejections become the order of the day and a person does not have guarantee of approval. However, the tune changes when you have a good credit rating as most lenders do not hesitate to approve you for a loan. As such, having a good credit rating means that you have a better chance of getting approved for a loan or credit card application.

Higher borrowing capacity

+One of the best things about having a good credit rating is the fact that financial lenders are more than willing to let you borrow money because you have been tried and tested and you have proved beyond any reasonable doubt that you are capable of repaying your loan on time. Who wouldn’t want that? Having a good credit score gives you freedom and peace of mind in the knowledge that you have access to higher borrowing limits.

Access to a phone contract with no need for security deposit

Getting approved for a simple phone contract becomes a herculean and daunting task especially when you have bad credit. In fact, most UK providers require that individuals with bad credit pay a security deposit or provide a guarantor before being approved for a phone contract. Of course, this is embarrassing not to mention a great source of stress. The same cannot be said of a person with a good credit rating. It becomes relatively easy and simple to get approved for a cell phone contract with no need to pay security deposit upfront.

Negotiating power

When you have a good credit score, you gain more negotiating power and as such most of the time you end with low interest rates as compared to those with a poor credit rating. You negotiate from a position of advantage and as a result you are able to receive great offers from different lenders without breaking a sweat.

To sum it up, everyone should aim to have a good credit rating. apart from the above benefits a person will also benefit from increased credit card limits, better insurance rates, bragging rights just to mention but a few.

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Strategies to get a home loan even if you have a poor credit rating

To be in a position where your credit score is nothing to write home about is something that most people loathe. Financial lenders have since time immemorial been very sensitive when it comes to having a good credit rating to a point where those with a poor credit rating feel as if they have been discriminated upon. While financial irresponsibility is the biggest reason for having a poor credit score, there are instances where a person’s poor credit rating is as a result of factors beyond them. Take for instance a person who was unable to meet their financial obligations in the past due to loss of a job or incapacitation and you will understand why everyone needs a second chance.

Having a poor credit rating is not always an indication of poor financial decisions in the past but can also be as a result of circumstances beyond a person. Well, today we are not looking at circumstances that informs a person’s poor credit rating but rather we are going to focus on the strategies that a person with a poor credit rating can utilize to get access to a home loan. The idea is to look at strategies that a person with a poor credit rating can take advantage to ensure that they get approved for a home loan.

Look for a guarantor with a good credit rating

The fact that you have a poor credit rating doesn’t mean that you need to sit back, feel sorry for yourself and avoid home loans like a plague. Most financial institutions in the UK would approve your home loan if you have a guarantor with a good credit rating to cosign your loan. In the event that you default in repaying your loan, your guarantor will be liable to pay the loan amount. All you need to do is ensure that you convince your guarantor that you do not have any intention of defaulting your loan but that you need him to cosign for the purposes of you getting the loan you need. The guarantor must have a good credit rating as well as a stable source of income if he/she is to qualify.

Provide collateral or security

From time immemorial, individuals with a poor credit rating have found the going easy when applying for a home loan especially if they have some form of asset to pledge as security. Financial institutions rarely decline a home loan application especially if the applicant pledges security or collateral. Assets that you can use as security include jewelry, boats, land, your home, car, property and so on and so forth. So long as the valuation of the said security is enough to cover your loan amount plus interest should you default, lenders have no problem approving your home loan request.

Make use of your savings as bait

Well, the word bait might seem sinister but if you are able to prove to your lender that you have sufficient funds in your bank account, there shouldn’t be bottlenecks when it comes to approval of your home loan. Lenders believe that if you have substantial savings, you are capable of repaying your loan. People with a savings habit are viewed favorably as opposed to those with no savings to their name.

Work on improving your credit score

Granted, there are times where your bad credit is as a result of errors here and there. All the same, if you have bad credit, it’s essential that you check your credit report for any errors and have them resolved before you apply for a home loan. At times, your poor credit rating could be as a result of bills you settled beyond the set date and which have not been reflected hence the need to work with a financial advisor to resolve the situation before you apply for a home loan.