Guarantor Loans vs. Logbook Loans, Which One to Choose?
Getting approved for a loan has always been easy and simple for someone with a strong credit score. It is easier to choose the right lender, set your repayment duration and even negotiate on the interest rate applied to the whole amount. However, it used to be very difficult for people with poor credit history and bad credit ratings to get a loan. No one really thought about solutions for them, despite their poor financial situations.
The current financial sector is more considerate when it comes to people with low credit score. There are countless short term loans, small loan amount packages and private lenders willing to help you out in times of financial difficulties and urgencies. There are also no credit check loans, logbook loans, payday loans and guarantor loans.
In fact, there are now so many options that it has become hard to choose the right one. The two most popular borrowing options for people with poor credit ratings are logbook loans and guarantor loans. Although the two are relatively the same, there are some differences between them. Before choosing the right one for you, read their specifications here!
Since logbook loans are functional, they are the most popular among people with bad credit history. All you need to do is transfer the ownership of your car to get the loan. You will get it back once the total amount of loan has been repaid.
However, there is a huge risk involved as you can end up losing your vehicle if you fail to make the repayment in time. Other than this, the interest rates for logbook loans are also extremely high. In the long run, you will lose far more money than you borrowed. They can also be risky as there is hardly any certification or registration for borrowers. However, if you are in desperate need of money, you can opt for logbook loans.
This is also a popular lending choice for people with bad credit score. The risk for guarantor loans is also comparatively low as you will not need to use your assets as collateral. Other than this, the interest rates for guarantor loans are also relatively lower as compared to other short term loans. All you need to do is to find a guarantor and get the lending and repayment agreements signed and approved by them. This is a great option for short term loan payment if you don’t have any significant assets such as a car or home.
Choosing the One: Logbook Loans Vs Guarantor Loans
Choosing the ideal one between these two options depends on your circumstances. If you manage to find a guarantor, going for a guarantor loan is a good choice. Usually though, people who cannot get a loan by any other source go for logbook loans. If you have a really bad credit history, it is much easier to get a logbook loan than a guarantor loan. However, in case of any credit default, guarantor loans have less risk as compared to logbook loans.