Avoid finance against car

Wed, 07 May 2008



According to recent reports, more and more UK consumers are taking out finance products known as ‘logbook loans .’ This type of high interest rate product is borrowed against the value of a car . Specialist debt counselling charities have made it clear that this type of credit agreement could be fraught with risk.

As more and more consumers face the reality of bad credit, with nowhere to turn to borrow money, lending such as this appears. In the case of ‘logbook lending’ companies lend for a percentage of the car, retaining the original documents of the vehicle as part of the agreement.

Catherine Torazzo of the Citizens Advice Bureau was reported as commenting: "You can lose your car if you default on a payment, and the lenders have an awful lot of power, while there is very little consumer protection for the borrower."

Bad credit car finance is also facing an uncertain future.
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