If this is your first time applying for a logbook loan, you have your work cut out for you. While easy to avail and readily accessible online, there is more to the financial product than what lenders tell you. But don’t worry; this guide is created to tell you everything you need to know about the financial product.
Logbook loans are secured personal loans. That means you need collateral to avail the product. In this case, the collateral is your vehicle, which you can keep and still use. The lender will only take your logbook document. Once the bet agreement is signed and you loan approved, you can receive the money in minutes and use it to meet a wide variety of personal needs.
With logbook loans, loan amounts are more flexible since there’s security involved. Most lenders offer loans from £500 to £50,000 while others only offer up to £15,000. In any case, the maximum amount you can borrow will depend on the type of car you own and its official trade value. In general, you can borrow up to 50 or 70% of said value maximum.
Logbook loans can be repaid in 12 up to 36 months. The payment is set monthly complete via direct debit deduction. Other arrangements involve a debt collector collecting your payment from your address.
Eligibility criteria and requirements are pretty straightforward with logbook loans. You just need to meet the following criteria and prepare the documents to get approved fast:
Advertised with the promise of quick cash and no credit check, logbook loans are pretty handy but at a cost. The average representative APR for the financial product is 400%, a steep price to pay for interest and related charges. To make sure that you won’t get stuck with a costly loan, use comparison sites such as Uswitch.com to compare your options accordingly.
Compared with unsecured personal loans, logbook loans are more costly considering that there is security involved. In the event of delayed or missed payments, your lender can use the debt agreement and bill of sale document to repossess your vehicle. If you are still unable to repay the loan after repossession, the lender will eventually sell your car to cover for your outstanding balance.
If you have bad credit and have been refused a loan by major banks and high street lenders, resorting to logbook loans is one alternative you can consider. Just make sure to follow the simple rule to borrow only what you need and what you can afford to avoid any costly consequences in the end. Once approved for the loan, commit to pay your dues on or before the due date as that’s the only way to prevent vehicle repossession.