What you should know about logbook loans in Kenya
Logbook loans in kenya are becoming a regular way of acquiring quick money for Kenyans. It is a form of securing a given amount of money against your car. It helps a lot in times of emergencies according to people who have used them.
How logbook loans work
Logbook loans are flexible loans which are offered by financing institutions against car logbooks. They offer different amounts if money according to the value of your car. Most of them value your loan at half to 75% of the market price of your car.
This is actually a nice deal when you look at it as the person with urgent need for money. They do help a lot. After you secure that amount of money, you are now given a timeline for repayment of the loan to tatality. Some five half a year or so while others give up to two years.
During this period, some let you use your car while other have it stored in a secure place for you. With your logbook in their hands, you can now be using your car while repaying your loan.
Logbook loan repayment
This is where the real problem arises. Because you took the money urgently, repaying is not usually planned in most cases. After using it, you now have to look for a place to source it from and clear the loan in time to get your car back.
Most of the financing institutions are actually less tolerant with the customers when it comes to delays in loan repayment. The biggest problem arises when people lose their cars over little amount of money they took as loans from these institutions. Regardless of the amount, when you fail to meet the repayment deadline, your car and logbook are retained.
Understanding how this works is very important before getting into it. Sometimes it is advisable to sell or rent out your car during your emergency that taking a logbook loan. The details that are not revealed are the ones that end up putting many people in trouble at the end.
Not all of the financing institutions would do this. However,most of them would end up with the same trend when you fail to repay your loan in good time.
Is it advisable to take a logbook loan during an emergency?
Well, of you have other options that are viable, it might be wise to avoid taking a logbook loan. However, if you do not have any options, they can come in handy but as the last resort. Due to those factors that we have highlighted above, a logbook loan might be a bad idea because the repayment is not usually planned for.
Other options that you have include renting out your car to someone for a while or at the extreme selling it out to a second hand user. They might seem quite impractical but they compare well to taking on a logbook loan. At least you have some value from it. It is more disadvantageous to take a logbook loan in Kenya. However, if you lack options, it might help you but you must have a good plan for repayment to be sure of having your car and car logbook back.