How much does a logbook loan cost?

One of the main downsides of logbook loans is its high cost. Providers, on average, offer logbook loan deals with a representative APR of 400%. In comparison with other traditional personal loans, logbook loans are among the most expensive loan products in the market. Despite the high cost, however, logbook loans offer the promise of quick cash many borrowers just can’t resist. If you have no other option but to resort to a logbook loan, understanding its cost will help you find a cheaper and better deal.

When it comes to the cost of your logbook loan, there are two types of representative APR you need to know about. Representative APR is what your lender uses to advertise their logbook loan deals. As its name suggests, this type of APR is just the representative.

For example, a provider may offer loans from £500 up to £25,000 at representative APR of 400%. That doesn’t mean you’ll get that rate for your loan because the representative APR is not the same as the actual APR. Your actual APR may be higher or lower than the representative APR. In most cases, only a small percentage of consumers get the representative APR.

As above mentioned, the rep APR is a pretty steep price to pay for a personal loan. Fortunately, there are now logbook loan offers at more affordable rates. Some providers, for example, offer loans from £500 to £5,000 at rep Annual Percentage Rate of 180% payable in 1 to 3 years.

If you wish to get access to £1,000 over an 18-month repayment period and the per annum rate is flat and fixed at 70%, you’ll be paying a total of 2,050 by the end of the contract term. That means paying somewhere around £113 monthly for 18 months. Click here to know more about APR and how it can affect your loan’s cost.