When your loan application is turned down by banks, and the options for credit continue dwindling, there is one place that one will always get relief; logbook loan dealers. Unlike banks, many logbook loan dealers are only interested in knowing the value of the car and your ability to repay. However, they charge a premium for their credit! In some cases, the annual percentage interest goes as high as 400%. Despite this, you can still pull down this high-interest rate using these tricks.
Be extra careful when selecting the lender
The bottom line to enjoying lower APR is picking the right lender. Because the lenders are free to fix their rates in the UK, the variation can range from 100% to 400% APR. Because all the lenders are business entities and target clients in different niches, the borrower has to carry extra research to pick the cheapest. However, note that the rate is not the only factor to use when picking a good lender. Other important considerations include debt collection policies and flexibility as you will learn from this site.
Negotiate to have the APR lowered for you
If you thought that the interest rates are not negotiable, think again. Most logbook loans want to grow their businesses and, will not mind making some adjustments to suit clients’ needs. Here, you need to be smart and negotiate hard to get the APR lowered. For example, if you get a few quotes that are lower than what the preferred lender is giving, demonstrate and ask for better rates. Here, you need to demonstrate the willingness to walk away. A good logbook loan dealer will never let you take business elsewhere. Rather, the dealer will seek to strike a deal to make you part of his clients.
Check for dealers with special offers on their loans
To win more clients, dealers always release special offers in the form of reduced APR. Notably, the lenders understand that they are competing with other lenders offering lower rates. Therefore, you will always get offers on lower interest rates to take advantage of. However, this will require ample research and patience.
Identify extra flexible loan dealers
Because you already have other loans and credit score is at the lowest possible point, it is important to anticipate some fluctuations during the repayment period. For example, your salary might get delayed, or unexpected issues emerge at some point. A good dealer should be highly flexible and allow you to renegotiate the terms without hiking the APR. For example, if you are late to repay with a month or two, the lender should find out and make it possible to correct the outstanding issues without repossessing the car. Though many are those who attach high penalties to such delays, there are others who require you to remedy the anomaly within a specific timeframe before taking action.
Carefully review the dealer’s policy to remove punitive clauses
One of the main reasons that logbook loans are costly is the hidden costs. Even if you opt to repay the loan faster, the chances are that the lender has attached a penalty to it. You can make the loan more affordable by carefully reading through the policy statement to identify and have the punitive clauses removed.