Why should you apply for a logbook loan?
Granted, this is the question that most people ask when they are prompted to apply for a logbook loan. Individuals with a good credit rating see no reason as to why they should apply for a V5 loan considering that it’s specifically designed for individuals with a poor credit rating. However, going by the numbers, there is no doubt that logbook loans continue to soar in popularity. Approximately 9 million UK citizens apply for a logbook loan annually and this is testament to the fact that logbook loans are here to stay. That said, why should anyone consider applying for a logbook loan?
No credit checks and an opportunity to improve one’s credit rating
If there is something that has made logbook loans immensely popular, it has to do with the fact that unlike other loan products offered by financial lenders and high street banks, credit checks are not mandatory. In other words, the state of your credit score does not in any way affect your ability to get approved for a logbook loan. That said, perhaps the number one reason individuals with a poor credit score apply for a logbook is the simple fact that it accords them an opportunity to improve their credit rating. How does this work? Well, once you apply for a logbook loan, what determines whether your current credit score improves or takes a beating is how you actually make repayments. In light of this, diligent repayment of logbook loans positively affects your credit score for the better. Repaying without defaulting means that over time, your credit score will gradually improve for the better which means better interest rates in the future.
To build up a credit score from scratch
Unfortunately, having no credit score is just as worse as having a poor credit score. Most financial lenders find it difficult approving with no credit history to their name for a loan. The argument is that they have no way of telling whether the person in question is financially responsible or not. That said, such individuals should indeed consider applying for a logbook loan because there are no credit checks and the application process is not only simple but approval is almost always guaranteed.
The aforementioned 2 reasons are the most basic reasons as to why any person should consider applying for a logbook loan. However, there are other reasons such as basic and simple requirements, simple application procedure, faster approval just to mention but a few!