Logbook loans are sometimes heaven sent solutions for those people who cannot hope to raise much needed cash through a regular loan at a bank or other financial institution. There can be many reasons for this. Unemployment and a bad credit record are just two of the most common. Many people nevertheless need cash to deal with emergencies.
It is only possible to qualify for this type of cash advance if you hold the title to a vehicle that is completely debt free and where all the insurance fees are up to date. In such cases, lenders will offer cash equal to roughly fifty percent of the value of the vehicle. Interest is charged and this needs to be paid back in time. The repayment schedule of the advance itself differs from lender to lender.
When entering into this type of agreement, it is vitally important that you ensure that you will be able to pay the money back according to the schedule. You also have to realize that the interest can be very high. If you do not keep to the payment schedule, you may end up losing your car. The lender may even sell it to recover the outstanding amount.
Lenders do not bother with credit checks. They also do not conduct investigations on whether or not you will be in a position to meet your payment obligations. As soon as it is ascertained that you are the legal owner of the vehicle and that it is debt free, the money is made available. This is often done in less than a day.
The industry is regulated to some degree, but consumer organizations have long argued that more stringent regulations are needed, especially to curb the very high interest rates. In some states the amount that can be borrowed in this way is limited, and other states have passed laws regarding the fees charged to process the applications.
It is a fact that millions of people do not have ready access to conventional financial services. While it is almost always a bad idea to in debt yourself at high rates in order to solve another financial problem, the sad fact remains that many people simply have no other options. Logbook loans are certainly a fast way to raise cash.
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