A logbook is a legal document that shows you are the owner of a car. It’s like a title deed that provides proof you own a certain piece of land. A logbook loan is therefore a loan secured against a car. It’s more or less like a personal loan that is secured against a home. The difference is that logbook loans have less stringent requirements and are advanced to people who have been declined from high street due to poor credit history. The appeal of this kind of loan is that borrowers do not have to worry about having poor credit rating so long as they own a car that is in good state, has been in use for less than 10 years and has no finance attached to it.
How much can you borrow?
Technically, the amount of the logbook loan you can borrow is dependent on the value of your car. The minimum amount is £500 and the maximum is £50000. You can borrow any amount between the minimum and maximum amount set by the lender. There are lenders who allow you to borrow up to 75% of the current value of your car while others put the limit at 50% of the car value.
How does it work?
Before being advanced a SimpleLogbookLoan, you will be required to surrender your vehicle registration document (logbook) and sign a document known as bill of sale. This document details that your lender is, from the time you take the loan, the temporary owner of your car until you clear paying the loan you have been extended. The good news is that the vehicle remains in your possession and you can continue driving it as you repay your loan.
How long do you have to wait before you get the money?
There are many logbook loan lenders in the UK and the approval process is usually pretty fast so long as you have a logbook and your car is in good state. Basically, the loan can be approved within hours. You can get the loan by cheque which takes 4 days to mature and there are a number of lenders that offer quick cash service within minutes. The disadvantage is that it attracts an administrative fee set at 4% of your total loan money.
What are the advantages of taking a logbook loan?
The most appealing aspect of this loan product across the UK is the fact that it does not discriminate against people with a poor credit history. Lenders who offer this kind of loan do not carry out credit checks and therefore chances of being declined are almost nil provided that your car is in good state. Secondly, the requirements are not as stringent as compared to loans offered by mainstream banks. The approval of the same is fast and there is no need to disclose what you need the money for.
Disadvantages of logbook loans
While logbook loans have provided a safe haven to individuals in the UK who would otherwise not qualify for any kind of loan due to their poor credit history, there is also a downside to it. The interest rates charged are inordinately high. Secondly, you need to legally own a vehicle before you can use it as collateral for a logbook loan. Thirdly, in the event that you fall way back in repayments, the lender can repossess your car and even sell it to recap his money.
In a nutshell, it’s good to do proper research and settle on a lender across the UK whose reputation is solid and offers a great logbook loan deal. You can read reviews or simply talk to their customer support staff and understand their logbook loan product.