Payday loans are quickly becoming popular loan options in the UK. A lot of people going through really tough times take out payday loans regularly. However, despite their popularity, payday loans can be quite troublesome and account for some of the worst debt snares in the UK today. This post is about why payday loans can be disadvantageous and why you should take a logbook loan today instead.
What are payday loans?
These are short term loans taken especially by people who have poor credit, where the money lent is paid back by the next payday. It works by having the borrower sign a postdated cheque which gives the lender the right to their paycheck as soon as it arrives. This can be beneficial for people in a tight spot, but the problem exists for those who do not have another source of income, as it will trap them in a cycle of debt forever and ever.
It is easy to miss a payday loan repayment and once you do so, you are trapped in the cycle of debt. This therefore shows that payday loans cannot serve as any kind of long-term solution because in essence, the borrower will just be rolling their debt to the next payday.
Pay day loans are also really expensive. While the interest rates are reasonably high, considering they are not secured loans, they can however skyrocket up to 1000% on a small amount of money and cause a lot of problems for the borrowers who are often already in financial distress. The terms on the contract for payday loans are also very often obtuse and confusing such that the borrower, who is often in a hurry to sign anyway, ends up losing in the end.
Payday lenders are often unscrupulous in their dealings and can use many slightly illegal methods to drive borrowers to pay back the money owed them. It is very wise to watch out and be careful when dealing with payday lenders, because they can be fraudulent.
Only individuals who are employed fulltime are usually eligible for payday loans. Those receiving social assistance, working at part time jobs or those not owning a current back account cannot be eligible for payday loans.
Why logbook loans are more awesome
Unlike payday loans, which offer only £1000 at the most, logbook loans can offer as much as £50000 with the ceiling determined by the value of the vehicle being set in lieu of the loan. Logbook loans are an excellent source of funds for long-term loans or for individuals looking for a permanent way out of debt. The entire process of logbook loans are governed and monitored by strict regulations covered in the Bill of Sale act of 1878, amended in 1882.
Logbook loans can also be accessed by anyone, irrespective of their job or qualification. The only prerequisite is that the applicant has a fully serviceable vehicle (car, truck or even motorbike) that is less than 8 years old. Also, if you do not have a current bank account and you believe in dealing with cash, a logbook loan has you very well covered.