Logbook Loan vs Payday Loan

With the global economic scenario affecting employment rates it is little surprise that many seem to be eternally hard pressed for cash. If you are living paycheck to paycheck there are several private loan options you may want to consider. Secured loans are the best way to go, and these are good alternatives to traditional bank loans.

Payday cash advances, for instance have been gaining attention and most people opt for such loans to manage short-term financial strain. But in many cases these come with high interest rates and short repayment times, making them expensive in the long run. If you are looking for flexible short-term credit logbook loans are the perfect option.

Why Logbook Loans are Preferred

Logbook loans are similar to payday loans in that they provide quick credit and access to funds to help meet for short-term monetary needs. But that is where the similarities end. In general, payday loans are cash advances you take based on your next paycheck, which means that you need to repay the loan sometime after your next payday or face additional penalty charges. While repaying the loan from the subsequent paycheck is indeed a positive thing, in most cases people who use these loans often end up taking out more cash advances to repay the initial loan. This creates a cycle of debt that soon becomes difficult to break.

Logbook loans, on the other hand utilize your vehicle’s log book, which contains the vehicle registration and insurance details, as security for the loan. Since the lender is guaranteed repayment owing to the pledging of the log book, the loan period is more flexible. Taking a loan that offers a longer payback period means that you are not financially overstretched in an attempt to close the credit. Logbook loans are undoubtedly the preferred choice when it comes to short-term secured credit.