Should I get a loan from a logbook loan company?
We often encounter people from the local community who have rushed into borrowing from a logbook loan company when they have needed fast cash. PCCU usually come into contact with people once they realise how much they are actually repaying for what is usually a relatively small amount.
Some of these companies only lend money to people who have motor vehicles to secure the loan against, whereas some also provide personal loans.
The logbook loan is secured against a person car. When signing for the loan a person has to firstly prove that they own the car and hand over the vehicle’s logbook or registration documents. People should be aware that if they do not keep up with their payments they could have their car taken away and sold. Also worth noting that if the money raised through the car sale does not cover the outstanding loan value, then the person could be liable for the difference.
A large number of the loans from these companies that we encounter have a loan term of 18 months and the APR’s are eye wateringly big. Anyone who is looking at one of these loans should stand back, take a close look at the APR and importantly the total you may pay for the full loan.
We speak to people who have got into trouble regularly with this type of loan and the figures are frightening.
One example is £300 personal loan repaid of £67.97 per month over 18 months, with an interest charge standing at 990.1% APR – resulting in the full cost of the loan costing OVER £1200.
PCCU crunched some numbers to see how we would compare on the same loan;
£300 repaying £67.97 per month would take 5 months to fully repay the loan. The loan and interest total would be £324.37 – 38.5% APR.
If the loan was taken over 18 months at PCCU;
£300 paying £22 per month over 18 months at PCCU would result in a total repayment of loan and interest of £381.22 – 38.5% APR.
If you or someone you know is looking at the different borrowing options available and are considering a high interest loan, please step back to look at the APR and total amount repayable. The alternative is to contact a member of staff at PCCU today to see how we compare. All our staff members are highly trained to provide a confidential and understanding service.