The logbook loans concept is a fairly recent one. As such, a majority of people might not be in the know on how it works. What is clear is that it has been instrumental in helping people with bad credit all over the UK breathe a sigh of relief as concerns getting cash when pressed financially. Simply put, logbook loans provide individuals with a poor credit history an opportunity to get credit using their cars as collateral. Logbook loans have become very popular in the UK and this is because many people with credit problems can now get access to cash without worrying themselves sick.
Generally, the maximum amount of money you can borrow with a logbook loan is very much dependent on the value of your car. Many lenders across the UK allow borrowing up to 75% of the value of a car. To qualify or be considered for a logbook loan, you need to be residing in the UK, be over the age of 18 years, and own a car that is in good condition and without any finances attached to it. When you approach a lender for a logbook loan, they will always examine your car and assess whether it’s worth the amount of money you asking for a loan. If it is, they will be more than happy to proceed with the approval of your loan.
If it’s not, they will ask you to reduce the amount of money you require to be within the 75% maximum value of your car. You will also be required to provide your insurance details, provide proof of income, proof of address, and provide the cars MOT certificate and your card details. These are just to ensure that the whole process of approval is fast tracked.
Logbook loans do not discriminate against people with a poor credit history. If you have bad credit and own a car, you are good to go to apply for this kind of loan. The benefit is that no credit checks are done, the application process is simple, fast and you get access to your money within hours. What’s more? You get to continue using your car as you make repayments for your loan. The general period for repayment is 78 weeks though some lenders can extend the period of repayment up to three years.
Are there any risks? Of course yes! The annual percentage rate charged on logbook loans is very high and in the region of 400%. In fact, there are lenders who charge higher than that. The downside is that you might end up paying almost twice the principle amount you took. Secondly, the risk of losing your car is very high should you fall way back in repayments. According to the bill of sale agreement that you sign with the lender prior to taking a loan, the lender has the capacity to repossess and sell your car should you be unable to service your loan.
On the brighter side though, it doesn’t matter whether you have a low credit score or if your credit history is nothing to write home about. A logbook loan always has you covered.