In the face of financial emergencies or unexpected expenses, personal loans offer a quick way out. Logbook loans, in particular, came as handy solutions for people with bad credit who can’t otherwise avail a traditional loan from major banks and lenders. If you’re in the market for a logbook loan, don’t sign a deal just yet unless you know everything about the financial product. Here’s a quick guide to logbook loans to help you along.
What are logbook loans?
Logbook loans, as you can glean from its name, are personal loans that are secured against a borrower’s vehicle. The loan, therefore, is a secured personal loan where the lender keeps your vehicle’s logbook or V5 document. This means temporary ownership has been handed over to your lender while you still get to keep your car and the cash.
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How much can you borrow?
With a security involved in the form of your vehicle, logbook loans offer larger loan amounts than unsecured personal loans. In most cases, you can borrower between £500 and £50,000. Or depending on your vehicle’s official trade value, lenders can lend you up to 70% of said value for the maximum loan amount. The loan is payable in 12 months up to 36 months either through bi-weekly or monthly payments.
Who are logbook loans for?
As mentioned, logbook loans are specific for car owners with bad credit under their belt. With the vehicle as security, there’s no credit check involved, which is the best part about logbook loans. Even if you have a history of ccjs or defaults, you can still avail a logbook loan provided that your car is acceptable and you meet the eligibility criteria. You can then use the money to meet a variety of personal needs from overdue bills to rent, medical expenses and more.
What are the requirements?
To be eligible for a logbook loans, borrowers are required to meet only the most basic of requirements. One, you must be of legal age. Two, you must live in the UK and lastly, you must be a car owner. Your vehicle must be free of any financing to be acceptable. You’ll also be required to provide important documents such as your car’s V5 document, MOT certificate and insurance details among other things.
Where to apply for a logbook loan?
Logbook loans are widely available online. To apply for a logbook loan, there’s no need to leave the comforts of home. You just need to find a reliable lender with a solid track record and apply online. The initial application will require you to complete an online form and the lender will contact you for further instructions.
What are the risks?
Like with any secured personal loan, there’s always the risk of repossession with logbook loans. Once your sign and close the contract, you agree to the terms that the lender has the right to recover your vehicle as per the bill of sale and credit agreements. The lender may then sell the vehicle to cover for your outstanding balance in the event of nonpayment.
Should you apply for one?
Considering the high risk involved, extra caution is needed when taking out a logbook loan. While it’s accessible and quick to avail, borrowers must know and understand that logbook loans are not only risky but also costly. But so long as you understand how the financial product works and you’re sure that you can afford the monthly repayments, logbook loans can meet any pressing financial emergencies.