No one is immune to emergencies - that is why it is crucial to have an emergency fund.
But the honest truth is, an emergency hits when you least expect it. So even with the highest level of preparation, an emergency can potentially knock you off your pedestal either way.
And when it does, it might leave you in need of quick cash to fix the situation. It might be a medical emergency, funeral expenses of a loved one, school fees, or even something as simple as some extra cash to help clear your consignment from the port.
Whatever the scenario, an unplanned emergency expense can be devastating. Therefore, it is not surprising that many Kenyans who do not have sufficient rainy-day savings turn to emergency loans - such as logbook loans - in these situations.
Logbook loans can provide you with fast financing to help take care of the emergency and then pay back the loan later.
However, although emergency loans are a lifesaver, they are not free. In many cases, emergency loans are short-term and attract high interest. Hence it is necessary to consider the situation carefully before deciding on an emergency loan.
In a simple definition, an emergency loan is a personal loan used to cover large unexpected expenses. While there are many types of emergency loans, these loans are mostly common for people who are in urgent need of cash for an urgent situation.
These unexpected expenses can include medical bills, funeral costs, emergency repairs (e.g., car repairs), or other unforeseen life-changing events. Sometimes when such emergencies hit, an emergency loan might be the only option available to fend off an even bigger problem.
In addition, you can use an emergency loan - such as a logbook loan - to pay for expenses such as weddings, vacations, and even to make quick investments.
When it comes to an emergency, you can’t wait several days for your loan to be disbursed. Hence, borrowers look for lenders that offer quick loan disbursement - such as logbook loan lenders.
Logbook loans are easily accessible, give relatively high amounts (depending on the value of your vehicle), and are disbursed relatively quickly compared to other personal loans.
Logbook loans are secured emergency loans that use your vehicle as collateral.
If you don't have sufficient emergency savings to cover an unexpected expense, a logbook loan may be just what you need to bridge the gap. But not every situation is an emergency.
Kenyans apply for logbook loans for various reasons - some urgent and some not so urgent. However, just because it is an option doesn’t mean that every situation should push you into getting a logbook loan.
If not handled with the necessary caution, a logbook loan can potentially do more harm than good to your finances. For instance, you should ensure you have a payment plan in place before you sign up for one, as defaulting on the loan can potentially lead to the loss of your car.
Also, keep in mind that some logbook loans require you to pay fees upfront. So if you are in an emergency, make sure you can either afford these fees or choose a lender where you don't need to pay upfront.
Also read: 6 Deadly Sins When Taking a Logbook Loan
Just like most things in life, logbook loans come in different shapes and colors and have both advantages and disadvantages.
Here are some of the advantages and disadvantages of logbook loans in an emergency:
In summary, here are the pros and cons of using logbook loans in an emergency:
In truth, there are many loan options available that can give you a significant amount as quickly as logbook loans. But here are some alternatives depending on the urgency and level of your emergency:
Yes, and no - this entirely depends on the factors outlined above, key among them your ability to repay.
Emergencies happen all the time. It is a fact of life. And when they do, they might find you pretty unprepared. But do not panic! Every problem has a solution.
So even if an emergency finds you with no emergency funds, emergency loans such as logbook loans can come in and save the day. If you have a car, all you need is to know where to look for legit logbook lenders, do your research and send in your application. Then help will be on your way soon enough.
Thankfully, we have already done most of the work for you. Visit our logbook comparisons portal to view and compare some of the most credible logbook lenders in Kenya today.