Log Book Loans

[davebtelford]

So a financial watchdog is setting up an enquiry into log book loans because people are having their cars taken when they use them as security for loans and don't keep up the repayments.

Seems to me we could do away with at least half the watchdogs we currently have and simple create a STUPIDITY watchdog!

[accyman]

if your stupid enough to take a loan out against your car then your probbably too stoopid to be driving on the road so its a kind of a win win situation

they get their quick cash for a night out and we get one less idiot on the roads

although we could end up with another cyclist but they are pretty fragile and easily dealt with

[Accyexplorer]

I find most (if not all) "loan sharks" and "loan companies" disgusting, how can it be legal to charge folk 1500%+ interest?
While the folk that use them may of fallen on hard times and found themselves in a 'desperate situation', If their stupid enough to give consent to take on a loan with over 1500% interest and/or forfeit their motor, they deserve to lose their car etc.

That being said though,
It doesn't excuse these companies for exploiting folks naivety/stupidity.
Modern Society doesn't deserve to suffer the problems caused by the (careless) actions of the desperate folk these kind of 'schemes' create in the name of profit.....


... In my IMHO they may as well go the whole hog and get Italian mobster's with steroid freaks to dish out these 'loans'.

[Less]

Yes, these loan companies are a disgrace, they are legal though, so it's buyer beware, if you take out a loan using your car as security it is your own responsibility to ensure you pay back what is owed or else suffer the consequences.
You chose this method of borrowing, it's up to you to stick to the agreement, don't come crying to me if you lose your car by defaulting.

[accyman]

i took a logbook loan out...

boy were they not happy when they realised it was a diary of my bowel movements

[Neil]

Originally Posted by Accyexplorer

I find most (if not all) "loan sharks" and "loan companies" disgusting, how can it be legal to charge folk 1500%+ interest?
While the folk that use them may of fallen on hard times and found themselves in a 'desperate situation', If their stupid enough to give consent to take on a loan with over 1500% interest and/or forfeit their motor, they deserve to lose their car etc.

That being said though,
It doesn't excuse these companies for exploiting folks naivety/stupidity.
Modern Society doesn't deserve to suffer the problems caused by the (careless) actions of the desperate folk these kind of 'schemes' create in the name of profit.....


... In my IMHO they may as well go the whole hog and get Italian mobster's with steroid freaks to dish out these 'loans'.

It's ok quoting figures of 1500% and saying it's wrong but you have to look into deeper than that. That figure is quoted as a per annum figure but the loans are often only for a week or two.

I just went to the Wonga site and picked a loan of £100 for 7 days. It says I have to pay back £112.89. If I want the £100 to pay off a bill and I get paid in 7 days it could be a good deal. What does your bank charge for a missed direct debit or the company you owe it to? If it is more than £12.89 then you have saved money.

The interest on that loan is 365%pa with a fee of £5.50. Yes the apr is high but so is the risk to the company but that loan could save you money.

I am not saying these companies are good or bad just that sometimes they can help you out of a hole or if you abuse them can get you in a hole.

The big problem with credit is that there is no national register showing how much credit individuals owe and to which company. Having one would be a massive breech of privacy I suppose but it would also let loan companies instantly see if you had loans already and if they should accept you or not.

[cashman]

The thing is people view credit as a right, Its summat i have always avoided like the plague, if cant afford summat, i dont get it, not rocket science but commonsense. Theres far too many "Have to have it now" people these days, pathetic sods in my view. That is a generalization, not everybody, but no doubt some numpty will not see it.

[Margaret Pilkington]

Cashy, it must be a generational thing because that is my philosophy too.

Credit scares the bejasus out of me. I only got myself a credit card when we were going out to Oz for 6 months......knowing that without one, we would not be able to book into hotels, or do the travelling we had planned. But had I not been able to make arrangements to pay off the whole amount each month I would not have got one.
I rarely use my credit card.
Cash isn't King.....Plastic is!

The problem is, that those who would rely on a payday loan are usually inept at mananging their money. Lessons in money management should be taught in Primary school...and continued until children leave school...they should be able to work out what value is, and also how to keep themselves out of financial harm.
You do not need to be a maths genius to do this.

[cashman]

I only got one years ago fer hols n booking concert tickets etc n i wouldn't have done that if there was no need. now i do buy quite a few things online, so use it then rather than debit card, cos of insurance purpose.

[Margaret Pilkington]

Yes, I might use mine if I am buying something on which the insurance might be necessary......but other than that it is cash money for me

[Accyexplorer]

Originally Posted by Neil

It's ok quoting figures of 1500% and saying it's wrong but you have to look into deeper than that. That figure is quoted as a per annum figure but the loans are often only for a week or two.

I just went to the Wonga site and picked a loan of £100 for 7 days. It says I have to pay back £112.89. If I want the £100 to pay off a bill and I get paid in 7 days it could be a good deal. What does your bank charge for a missed direct debit or the company you owe it to? If it is more than £12.89 then you have saved money.

The interest on that loan is 365%pa with a fee of £5.50. Yes the apr is high but so is the risk to the company but that loan could save you money.

I am not saying these companies are good or bad just that sometimes they can help you out of a hole or if you abuse them can get you in a hole.

The big problem with credit is that there is no national register showing how much credit individuals owe and to which company. Having one would be a massive breech of privacy I suppose but it would also let loan companies instantly see if you had loans already and if they should accept you or not.

I agree, they wasn't set up for a long term loan and they 'may' help some folk out.
In a ideal world if they did their job correctly with the vetting of the application the ads they plaster all over TV and shop windows would reel in less desperate fish and less would slip through the net.

As in most cases the % interest is regularly in the small print at the bottom, with the main advert being how the loan can help you with this or that.
Come to think of it, I don't think the voice on tv ads ever mentions the sky high payback risks, hmmm
Its a con and sadly there are folk struggling for cash that get reeled in high risk or not and that's just wrong (in my opinion).

Don't forget, for some folk, it takes a little debt to teach them what to look out for, especially when their young and still wet behind the ears.
Margaret hit the nail on the head, we should (strictly) teach our youngsters about (bad) money management.

[Neil]

Loans are a bit like ebay shopping, I always look at the item price including post and packaging. With a loan you need to look at how much it will cost you in total over the pay back period and decide if thats worth it to you. What's worse than payday loans are some of the ones you get from places like furniture stores. The ones where you can pay back as much as you like as long as it meets the minimum payment. If you just pay the minimum you will pay a fortune back for a very long time.

[Margaret Pilkington]

The problem today is that children do not see their parents struggling to find money for every day items like a loaf of bread.
When I was young it was a frequent occurrence to search out the coppers that had gone down the back of the sofa..To look if we had any 'Cheshire Milk' bottles to go back to the shop for the three happence deposit....to look for pop bottles which had three pence back on them.....and the triumph of finding such items (just so that we could have a slice of toast) is memorable...So is the not finding the money....it meant that we would go hungry.
Today children do not see the reality of credit card bills.....because it isn't seen as realistic to let them know of the financial constraints a family is in....Because in truth, today debt seems to be 'no big deal'. Far different from when I was growing up.
My early life set the tone for my suspicion of debt.....for my dislike of owing anyone money.

Personally, I think it is a healthy attitude to have. I will not incur a debt that I cannot cover.
I have no mortgage......this was paid off at the earliest time......and really speaking, this was the only debt that I could not cover at the outset....but I would not eat rather than miss a payment.

[Accyexplorer]

Allegedly folk are raising money with "logbook loans", then (would you Adam an eve it) they are selling their cars before settling their debts (tut tut).
"These loans, unlike other forms of credit, have been known to leave innocent third-party buyers liable for the previous owner's debts".
According to what I've read, the lender doesn't have to (an often doesn't) place the loan on a register, so it won't come back on any HPI check that's commonly done before buying a car.
I'm not sure if this has been fixed as it is a few years old now.

BBC - Press Office - 5 Live Investigates logbook loan scam

[DAV007]

I thought they took the v5 as insurance?
Of course you can apply for a new V5 but the loan company hopes you don't realise that.