Log Book Loans are a credit product which is starting to receive a little attention in the UK media thanks to the fact that they are now being used by more people. The reason for this is that with the worsening state of the UK economy more of us are starting to struggle with the amount of money we have to play with. Whether this is down to the fact that we have lost our job,received a pay cut or are just finding it hard to deal with rising costs of living sometimes a loan feels like just the right solution.

Log Book Loans pride themselves in providing cash to those in need extremely quickly. All you need to get access to the money is your own car in good condition with little of no finance outstanding on it which is taxed, MOT'd and insured. The company uses the vehicle as insurance against you not being able to make your repayments so the can afford to entertain customers who have bad credit ratings.

Many people have already written about log book loans in the UK but I'm going to analyze the reasons to stay away from this form of credit in this article. The positive aspects of log book loans are of course easy to read about on the website of any log book lender but for the negative stories about their use you have to dig a little deeper. There are forums on the Internet which have many posts from people who have used this product in the past who has encountered severe difficulties which have taken them to a whole new world of financial pain.

Log book loans have a couple of aspects of their nature which should cause anyone with an ounce of common sense to give them the wide berth. The problem is that when we are in need of in a hurry we don't have any time to think about the consequences of our actions and this can lead us to make decisions that we would otherwise have avoided. Its better to get your head straight about why you need to stay away from log book loans before the circumstances arise which might see you making use of them.

The most important negative aspect of the log book loan is the fact that they cost so much money. With interest rates of over 400% you could be forgiven for thinking that you are dealing with a loan shark. What this means is that if you take out a log book loan to the value of £1500 and pay it back 1 month later you will find yourself out of pocket to the tune of £340 in interest. Things get much worse when you decide to use their services over the long term. A £1500 loan which you pay back over 78 weeks will end up coming to a total eye watering cost of £4180. For people who are already in financial trouble these prices can be crippling and will undoubtedly leave you in a must worse financial state than you started in.

The cherry on the top of the log book loans cake is the fact that your loan is secured on your car which could be your only form of transport and for many people their lifeline to the outside world. When desperate for cash you probably won't think too much about the possibility that your car can be taken off you. You will just be concentrating on getting the money you need now and I can't blame you. The prospect of your car being repossessed seems like a distant, far off threat that is unlikely to materialize.

Unfortunately, in the world of Log book Loans, cars are repossessed on a regular basis and its best not to assume that it won't happen to you. Fall behind on your payments and you will very quickly find that you have a couple of fine young gentlemen at your door looking for your car keys and they won't take no for an answer.

If you think thing aren't bad enough, keep in mind that log book loans lenders are also more than eager to add extra charges onto their you already massive bill. If they have to call you, write you a letter, or if you are late with a payment they will charge you more interest or set fees that you will have to pay off before you get the log book for your vehicle back.

As you can see, taking out a log book loan is not all a bed of roses like the companies would have you believe. If you are tempted by these loans because you find yourself in a difficult financial situation then the best thing you can do is seek financial help from an impartial source. In the UK, your best is to get in the phone to the Citizen's Advice Bureau who will be able to do much more for you than a log book loans company.