When people first start looking for a no credit check loan online, they might get feel shocked by a huge number of websites, lenders and brokers. Not to mention a number amount of websites that simply look like scams or have a dodgy feel about them. One of the more accurate decisions to be made is to decide between payday loans or logbook loans. They seem similar on this platform, but there are several crucial differences between the two forms of no credit check loan.
This article will first look at the similarities between the two most popular types of bad credit loans and then go on to list the differences. Some of these may be obvious to readers who have done some research online, but some things are more subtle and may affect the decision made by the potential borrower.
Similarities between logbook loans and payday loans
- Both types of loans are no credit check loans.
- Leaders of both types of loan will lend money to borrowers with very bad credit or who have been refused by other lenders in the past
- Borrowers can make the initial application online for both logbook loans and payday loans.
- Both have higher APR rates than mainstream banks which reflect the fact that they lend to lenders with poor credit who consider as a bigger risk.
- Logbook loans and payday loans are both often seen as fringe financial products and not part of the mainstream lending industry. Also, some people having a bad opinion of the sector as a whole.
- You need to be a UK citizen over 18 years old to borrow money.
Differences between logbook loans and payday loans
- With a logbook loan, your loan is secured on your vehicle. Even you may lose your car if you fail to repay the loan. However, the borrower keeps full use of the car during the loan period. With payday loans, the lender makes sure that the borrower can repay the loan i.e. has an income and then issues unsecured loans rather than secured loans like logbook lenders.
- You can borrow larger amounts of money with logbook loans than payday loans. Logbook loans, meaning a borrower can take as much money as he or she wants as long as the value of their vehicle covers the loan amount. Lenders often lend half the market of value of the car. Payday loans tend to be loans of less than a £1,000, whereas logbook loans may go as high as £50,000 if an expensive vehicle is used as collateral.
- Logbook loans have a lower APR than payday loans also the loan period is usually much longer. Whereas a payday loan is taken out for a month at a time until payday, a logbook loan might have an 18 month repayment period.
- There are far more payday loans lenders available to choose from than logbook loans lenders in the UK at this time.
Visit logbook-loans.net today, Logbook loan quote gives a better idea of the terms on which the loan will be rendered. and find our articles on how to get financial freedom, how to redeem your credit score image and advice on sound financial planning.