Logbook Loans Explained
If you need quick cash and you have a poor credit history, there’s no need to rely on expensive unsecured loans with limited loan offers. So long as you’re a car owner and you reside in the UK, you can avail a logbook loan in as fast as within 24 hours. If want to take out a logbook loan today, here’s a full guide to help you understand everything you need to know about the financial product.
What is a logbook loan?
As opposed to unsecured loans, logbook loans are secured loans where you need a security or collateral to be eligible. This means that you must be a vehicle owner to be able to apply. Since your loan is secured against your car, you can borrow larger loan amounts typically up to £50,000 while the minimum loan amount is £500. The loan is payable bi-weekly or monthly at repayment terms starting from 12 months up to 36 months.
Who are logbook loans for?
Logbook loans exist to cater to borrowers with bad credit and cannot avail a personal loan from major banks and high street lenders. If you find yourself in an emergency and you need a quick fix solution, taking out a logbook loan is a viable option. To be eligible for the financial product, just make sure you meet the basic requirements. You must be of legal age who resides in the UK and has a vehicle registered under your name. The car must be free of any type of financing and it should be less than ten years old.
For a speedier processing of your loan application, it is highly recommended to prepare the following documents: V5 document of your car, proof of address such as your utility bill, MOT certificate, and insurance details, 2 IDs with photos, recent pay slips and recent bank statements.
How much does a logbook loan cost?
When it comes to the cost of the loan, logbook loans come with a representative APR of 400%, on average. This cost is already inclusive of the interest rate, administrative charges and related fees on a yearly basis. Though still expensive, the loan is much cheaper when compared with unsecured loans such as payday loans. Thankfully, there are more and more providers that are offer lower APRs due to tougher competition among lenders. To find the best deals, shopping around is the key. You can start comparing your options today, just head over to http://paydayloans.money.co.uk/logbook-loans.htm.
How logbook loans work?
When you use your car as security for a logbook loan, you will be handing over temporary ownership of said vehicle to your lender. The lender gets to keep the necessary documents while you still get to keep and use your car. Prior to approval, your lender will ask you to sign a credit agreement and bill of sale document, which will essentially allow your lender to repossess your vehicle in case of nonpayment. The lender can also sell the car eventually to cover for your outstanding loan balance.
Should you take out a logbook loan?
Considering the cost and risks involved, it is very important to borrow with extra caution. Plan your borrowing as thoroughly as you can. As a rule of thumb, it is highly recommended to borrow only the amount that you need and you can afford. In fact, you should only borrow when truly necessary. Though logbook loan lenders will not require you to disclose the reason behind the loan, it would be wise to only borrow for financial emergencies such as medical expenses and overdue bills.