Property News · March 30, 2014

Fast cash – with 500% interest, sexual harassment and death threats


The new regulator is in hot pursuit of logbook lenders who, in return for fast cash, can seize a borrower’s car if they fall behind with repaymentsOne borrower was on his way to work when his car was repossessed. Others have faced death threats and sexual harassment by lenders chasing repayments. Logbook loans, where borrowers put up their car as security for credit, have been worrying debt charities for some time, and now the City regulator has told The Observer of its concerns about a sector where rogue behaviour is widespread.Officially known as bills of sale, logbook loans are usually used by people in a hurry for a lump sum who are unable to access credit from mainstream providers. The loans are often advertised as a way to access “fast cash” with “no credit checks” and allow people to raise larger sums than from a payday lender or other alternative credit provider. Providers are prepared to offer up to 50% of the car’s value, with repayments typically arranged over a 12-month period. However, interest rates are often in excess of 500% APR, so costs quickly add up – and because lending is secured, cars can be repossessed if payments are missed. Continue reading…

Source : theguardian.com
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