Many are the times that media carry the stories of logbook loans that went bad. Well, it is no doubt that the interest rates are higher compared to conventional banks, but they are invaluable if you are extra careful. In this post, I share the story of Johnson, a supervisor with a local company who conquered all odds to succeed with a logbook loan. When Johnson defaulted on bank loans in the past, his credit score moved down, and no other financial institution could lend him more.
Johnson defaulted on initial loans, and the remaining options were limited
When Johnson, a father of three and a supervisor at a local company, took the first two loans, he expected everything to change for the better. Before starting the family baking business, his last born son fell ill and got admitted in a Manchester hospital. All the money he had borrowed and his savings were used on medical bills. It became so dire that he had to default serving the loans for 6 months. Things went from bad to worse. He was reported to the credit bureau, and his credit score fell so low that no other financial institution could agree to loan him.
Once his son recovered, Johnson started servicing the loans to the extent that nothing was left to start their home bakery. His efforts to seek another loan from different banks never got approved because he was seen as a high-risk party. He had to look for alternatives to keep the dream of running the home bakery alive.
Suggestion to take a logbook loan
Though he had all along known about logbook loans, he never considered them because of the high-interest rates and risks. His wife compelled him to go ahead and take the loan against their only family Citroen so that they could start the family business. Before taking the logbook loan, Johnson visited a local financial expert who gave him invaluable advice to only select the best company. He used the following criteria to select the best logbook company;
- Evaluated the one with the lowest interest rates.
- Selected the company with the focus on helping clients.
- Negotiated with the company about his situation and better rates.
Faster loan processing and investment into home bakery business
Once he was sure that a logbook loan would work, Johnson filled all the details, and the loan was released within 24 hours. Because his wife had training on baking, they hired one staff, procured all the required equipment, started a website, and a blog. Besides, they also installed a banner next to their home shouting New Offers, New Cakes, and Home is Better!
Interesting enough, the demand they got through the website was more than they could meet. Besides, the local people came in large numbers to get a taste of home. Because Johnson had timed the launching with his three weeks off from work in summer, he helped with marketing and clients kept growing day after day.
Clearing the loan and resigning from work to build family business
By the time Johnson off was over, so established was the business that he made the decision to resign and concentrate with baking. The home Citroen was very useful in delivering cakes all over Manchester. He cleared the logbook loan and other outstanding debts in record time. Interestingly, his logbook loan lender was one of the first clients, and also referred others. Besides, the banks that had denied him credit started calling asking whether he required additional financial support.