Receiving a loan in the current economic climate via traditional routes is becoming increasingly difficult. It is estimated that around two thirds of borrowers over the age of 55 who have a household income that is in excess of £25,000, were not granted the loan rate in the three month period leading to September 2012. (Freedom Finance)
Banking criteria in facilitating loans has become incredibly difficult in this struggling economy. This is down to the process of labelling different consumer groups as high risk. For instance, research indicates individuals under 30 earning more than £15,000, were not eligible for the best deals.
The days where Banks used to take a risk on consumers are long gone. By labelling, Banks find older consumers a risk in that they might not be able to repay their debt in full; young professionals are seen as having a limited credit history or in many instances just not earning enough.
Individuals have been turning to alternative finance in these struggling times, meaning Logbook loans have seen an increase in popularity because of the situation. The benefits seem to be driving consumers towards the financial option.
Logbook loans are loans which are secured against a vehicle. They are more accessible even to individuals with bad credit. It’s a quick service and many consumers benefit by having money straight away.
Whereas the traditional methods of borrowing have turned down loyal customers, this method of finance has provided individuals with a flexibility they never had before. Payday loans are another option; however, logbook loans are 93% cheaper and simpler.
Requirements for qualifying for a logbook loan are; the individual must own the vehicle they are taking out a loan against and secondly the vehicle must be free of finance. Consumers can take out loans up to £100,000 dependable on the value of the vehicle.