Useful information about APR

Yes, we know it’s higher than your typical high street bank rate, but there are simple reasons for this, and we’re more than happy to explain:

1. Much like traditional lenders, we could use fixed fees, long term products and small print to dramatically shrink our annual percentage rate (APR). However, the beauty of our short term service is its unique flexibility and complete transparency - and that's something we won't compromise just to appear more conventional.
   1. If a customer borrows £1,500 and pays it back over the full term of 78 weeks, their total repayable would be £4,180.80 (£2,681.80 in interest and fees), however, that same customer could choose to settle their loan (and the vast majority of our customers do) at any point during the term of the loan, and receive an interest rebate relevant to how soon they settle. Therefore the sooner they settle, the less expensive the product becomes. For example, by settling the loan after 4 weeks, the total repayable is just £1,919.18 (£419.18 in interest and fees).
2. We provide a unique service which is quick, professional and discreet, which is what our customers require. It is because of our professionalism and unique service that 20% of our customers use us time and time again. To provide this unique and innovative service, Logbook Loans needs to employ a large Underwriting team which covers the entire UK. All of these Underwriters respond to customer enquiries as quickly as possible, to help provide the urgent service that our customers need. Compare the cost of this set up with traditional lenders who operate centrally and are therefore able to process far more applications than someone field based, and who has to travel to meet customers to review their documents and vehicle etc. This is another valid reason why the cost of a Logbook Loan is more expensive than some other forms of credit.
3. Even taking the above two points into account, it is total nonsense to compare Logbook Loans to a mainstream lender, because Logbook Loans doesn’t conduct credit checks on customers. We provide a genuine ‘regulated and licensed lender of last resort’ service which is available to the 10,000,000+ in the UK who are unable to obtain mainstream finance. We are a licensed and regulated lender, and but for the lawful and decent service we provide, customers would be forced into the arms of unregulated and unlawful money lenders, with serious and dangerous ramifications.
   • Because of this the risk posed to Logbook Loans is far higher and therefore the cost of maintaining our customer’s accounts is naturally higher. This needs to be reflected in our rates, as with the first two points.
   • To illustrate the point that our APR is relevant to the market and the fact that we are a ‘regulated and licensed lender of last resort’, we can compare the cost of our 437.4% APR, with comparable products, which are far more relevant than a high street bank loan:

     Payday loans:	2,689% APR
     Provident:	272.2% APR
     Shopacheck:	254.5% APR
     Pawn broking:	156% APR
     Remember that a Pawnbroker will retain your asset, whereas we at Logbook Loans allow our customers to get on with their life and continue to drive their vehicle (also an asset which depreciates in value, unlike gold and jewellery etc).

Another APR myth busted:

The larger the APR the more expensive a loan, right? Wrong. It’s a common perception, but with Logbook Loan’s super-flexible approach to short term credit the opposite applies. This is a good indication of the potential for APR to mislead when trying to judge the cost of a short term loan.

The cost of a Logbook Loan is determined by the amount of money borrowed and the number of days you need it for - the shorter the term, the less you’ll pay in interest and fees. Yet APR actually increases as the term and cost of a Logbook Loan decreases. Confused? Well, as the loan period gets shorter, the more times you have to multiply and compound interest to make it into a theoretical annual figure!

Understanding how much a loan will cost to repay:

Much like a taxi, we offer a secure service that’s fast, convenient and transparent. You probably wouldn’t use one to get around every day, as there are cheaper ways to get from A to B, but on some occasions the slower or less reliable alternatives just won't do. In similar circumstances Logbook Loans can help you solve a short term cash flow problem without requiring long term debt. And whether you value or understand APR or not, you'll always know the total repayable up front. Unfortunately, this level of flexibility and transparency isn't standard in the world of finance.