The downturn in the economy over the past 5 years and many bank’s reluctance to lend to individuals has left many people unable to borrow from traditional sources as quickly and easily as they used to.
This has led many people to seek alternative lenders offering credit to people in the form of short-term loans. Over the last few years two of the most popular sources of short term finance have emerged, logbook loans and payday loans.
There are a few key differences between logbook loans and payday loans and the we will help highlight these.
Secured vs Unsecured
The main difference between logbook loans and payday loans is that one is secured and the other is not. Logbook loans from V5 Solutions utilise the security of the borrower’s vehicle (car, van or motorcycle) while payday loans are unsecured. This creates a distinct definition between who is eligible for either loan product and how much can be borrowed.
As V5 Solutions logbook loans are secured against your vehicle we don’t carry out personal credit checks. As long as you meet our qualifying criteria you should be able to borrow £300 – £10,000 quickly and easily with us.
As payday loans are unsecured the lenders carry out extensive personal credit checks and if you have a low credit score, CCJ’s or arrears then you may not be accepted.
A major difference between V5 Solutions logbook loans and payday loans is the amount that you can borrow. V5 Solutions offer same day logbook loans from £300 to £10,000 depending on your vehicle and personal circumstances. While Payday loans typically range between £50 and £300 they can be particularly useful if you only require a small amount to borrow over a short term.
Speed of Access
Payday loans offer same day loans, similar to V5 Solutions logbook loans, except that as the loan is unsecured the whole loan process can be completed online. This is very useful and convenient.
V5 Solutions provides same day logbook loans but we have to meet you in person to view your vehicle, sign our loan agreements and issue the loan payment to you. We can usually complete this all within a few hours of receiving your loan application!
While logbook loans and payday loans are typically more expensive than traditional Banks, they are far more convenient and flexible and if used correctly can be cost effective too.
A typical payday loan will cost £30 per £100 borrowed per moth. 30% interest per month. This means that if you borrow £100 for 1 month (or until your next payday) it will cost you £30 in interest and charges. In total you will repay £130. If you borrowed £500 it would cost £650 to repay in full.
As V5 Solutions logbook loans are secured on your vehicle we can charge you a lower monthly interest rate. If you borrowed £500 from V5 Solutions your final payment after 1 month would be £592. You would also be required to pay your 4 normal weekly instalments of £21.24.
If you have to extend your £500 payday loan for a further month you will incur an additional £150 in interest charges taking the total repayable to £800.
However, with V5 Solutions the total repayable after two months is only £749, including your normal weekly £21.24 instalments. This makes a V5 Solutions logbook loan cheaper than a payday loan.
Payday Loans are typically 1 month long compared to a V5 Solutions logbook loan which is 18 months long. In both cases you can settle your loan early and make large savings. With V5 Solutions you can settle your logbook loan at any time and pay less. To find out how much you could save by settling your loan early just call us on 01603615191.
Payday loans are typically deposited into your bank account. But what if you don’t have a bank account or you require the funds in your hand to pay for something urgently? This might not be the most convenient option for you.
Our logbook loan payments are more flexible and can be made either by cheque which you can deposit (or cash at various outlets in your town) into your account or we can pay directly into your bank by BACS or Faster Payment.
V5 Solutions provides convenient same day logbook loans throughout England. Use our logbook loan calculator for your free, no obligation, online logbook loan quote.
V5 Solutions are a committed responsible lender and we carry out comprehensive income and expenditure checks for each loan applicant before being approved. Please see our Representative Example at the bottom of the page.