Financial difficulties can arise any time of the month. Unfortunately, this is not the case with our paycheck. It comes on a fixed day and the money we get does not increase or decrease as per our requirements. To alleviate the burden of constant expenses and allow consumers to lead a dignified life without having to borrow money from friends and relatives, banks and financial companies have come up with an assortment of loans. These loans can be divided into secured and unsecured loans that are offered depending on whether or not you can pledge collateral. While unsecured loans are extremely expensive and hard to get, secured loans come with a relatively lower rate of interest and a pocket friendly repayment plan. If you are looking for a quick cash loan that is easy on your pocket too, you may consider loan against car.
Loan against car is a viable option if you do not have an asset to pledge other than your car and lack the ability to pay high interest rates associated with unsecured loans. The best part about loan against car is that you can still keep it with you to drive around and get urgent cash by using it as collateral. Loans against car are also called as log book loans. When you register your car, the government gives you a file called as logbook that contains all the information pertaining to your car such as registration number, the chassis, and so on.
Now you may wonder how a logbook can help you get a long term loan. Being a very important file, logbook can be pledged as collateral with financial institutions that can provide loans up to 120 percent of the value of your car. Loan against car is carefully designed so that every borrower finds it useful and convenient. As such, borrowers are given a very flexible repayment plan so that they do not miss out on monthly payments. Your monthly payment is based on the rate of interest and of course the tenure of your loan. So, you have to bear a bigger installment if you want a short term loan and a smaller installment if you opt for a long term loan. That's not all; log book loans are a good way of improving your credit history and pave the path for better loan deals in future.
Since lenders regard loans against car as secured loans, you are entitled to a repayment period as long as ten years. You may however save money by choosing a shorter repayment plan after evaluating your needs, expenses and income. In addition, you can also pay off the loan earlier if you have extra money at hand. This is a good option if you are self-employed or have your own business since your repaying capabilities tend to change all the time. However, do not forget to inquire about the prepayment fees and other charges that a company may ask you to pay for closing the loan against car in advance.