Car logbook loans are those loans where you borrow money from lenders secured against your car. The main criteria to get such loans approved is to own a car and you must have the logbook for your car which is also known as Vehicle Registration Certificate.
Pay day loans are loans, which you borrow and pay it back in your next payday. To be eligible for this loan, you should have a good paid job and a bank account and debit card.
Some similarities between these two types of loans:
1 There is less paperwork with such types of loan applications. You need not go through a hassle getting your money.
2 Since no major paperwork is involved in it, you get the money within 24 hours. Therefore, it is really fast and easy.
3 In both the cases, your credit history is not checked. If checked, this will be minimal. This is a boost for any person who wants loans but has bad credit history.
4 These types of loans are best options when you need money in emergency. You can pay off your medical bills or utility bills or even make minimum payments toward to your credit cards.
Now, they also have differences between them. Let’s check them out.
1 In case of logbook loans, you need to mortgage your car. In payday loan, you need not mortgage anything. Just your job or other source of income will suffice.
2 Payday loans come with higher interest rates than logbook loans, since you keep your car as collateral.
3 Though no major credit check in done with both the loans, the lenders will still see through your history when they issue payday loans. If you have very bad credit such as CCJs, or defaults with your earlier loan repayment even though your current net income is acceptable, the lenders might be hesitant to issue this loan. Unlike this, logbook loans are secured loan as your are mortgaging your car. If you default on repayment, they can easily recover their money.
4 You have a long period to pay back your logbook loans. Generally, the period is 5-6 years. In case of payday, you need to pay it back in your next payday. If not, then you will be termed defaulter and you will fall in payday loan debt. More finance interest rates will be levied on this.
Both these types of loans are excellent in need of emergency. Many people remain skeptical about payday loans, as the interest rates are high. On the other hand, others do not want to give custody of their loved cars to the banks. So, you need make choice which loan will best suit your needs. Both are useful and worth taking.