When people turn to logbook loans, the chances are they have been denied credit from conventional banking institutions because of poor credit score. Logbook loans are easy to get, and the amount is only limited by your vehicle. However, because of previous trial and failure to get credit elsewhere, many people are exhausted to the point that they rarely bargain for the best value. In this post, we bring you top secrets for negotiating the best deal with a logbook loan company.
Compare quotes and share them with the company of choice
The first and most important thing is ensuring that you pick the right logbook company. Take time to evaluate the companies offering the loans in the UK and compare to get the logbook loans quote that has the best terms. The focus here should be identifying the company with the lowest APN (annual percentage interest) and working with it. However, even if the company of choice does not have the lowest APN, make sure to demonstrate the cognizance of companies with better rates. Go to the extent of showing the willingness to walk away.
Just like other businesses seeking to cut deals for higher profitability, the firm of choice will not let you get away. One client, Denison Edgar applied the strategy right to have the APN lowered from 212% to 139%. Though other companies were offering lower rates, their terms and conditions were very strict. Therefore, he selected the company with higher rates and better terms; and then used another logbook loans quote to negotiate a better deal.
Insist on having punitive clauses on recovery policy redone
Because of borrowers’ behaviour of not comprehensively checking on all terms and conditions, some logbook companies often include punitive clauses. It is, therefore, critical to read through the entire agreement and pinpoint the sections that are punitive. For example, if the agreement indicates that the lender can come for the car within the first month’s default, insist on getting the section reviewed. No lender will agree to lose a client because of a single clause.
- Consider including a clause such as the lender can take away the car if the loaned fails to remedy the first or second default. This means that in the event that your salary is late, the lender will not take away the car because you have time to remedy the issue.
- You should also negotiate to include room for renegotiating the entire deal. For example, if you are paying a total of £150 every month and it is becoming difficult, adjustments with a specific margin should be acceptable.
- The lender should also be ready to work with a lower rate if you source money elsewhere and clear it faster. For example, if you took £20,000 to repay in 24 months and in the middle of that time you get cash to clear the remaining debt, the lender should be ready to rework on the interest. Make sure it is included in the agreement.
Create a line of repayment direct from your salary
Instead of taking the salary and making the payment to the company; why not leave the load to your bank? This will help to maintain consistency and reduce the temptation of using the money in other ways. With a direct line of payment, make sure you are in regular communication with the lender to win his goodwill during the repayment period.