Get the lowdown on Logbook Loans
You’re probably reading this because you are on the lookout for a loan product to suit your needs. Don’t worry, there are so many people in the same boat as you. In 2017, thousands of inhabitants of the United Kingdom are struggling financially and it’s difficult to get by day by day, let alone month by month.
Your paycheck only manages to stretch so far. Come the end of the month and you are probably down to your last few pennies. Don’t worry, you are not the only one. And then what do you do in times of emergency. Not many people earn enough money to have an emergency savings fund. When they need some spare cash, it simply isn’t available.
For that reason, people turn to loans. In the past, if you had a bad credit score, you simply had no price so securing one. Luckily, times have changed and even those who have a bad credit rating, who have county court judgments against their names or even those who might have been declared bankrupt can secure a loan.
These take the form of bad credit loans and there are a range available, some offering small amounts and others large amounts.
If you own a car that is not more than 10 years old, perhaps your best bet is a logbook loan. Here, money is borrowed to you while your vehicle acts as a form of collateral. You can still drive it, however. These loans can be for anything from 250 pounds to 50 000 pounds. Let’s take a closer look at this loan.
The inner workings of a logbook loan
In our experience, we have found that a large portion of the UK public simply does not know about the many loan options available to them, especially logbook loans. It is our mission to not only provide logbook loans to the public but to educate them about it as well.
So how does a logbook loan work?
Well, firstly you need your own vehicle. It needs to be fully paid off as well and can’t be more than 10 years old (although we will consider older exotic or sports cars). You could even bring other vehicles, as long as they are less than 10 years old. The car is assessed by our experts, we ask you for a selection of documents (ID, pay slips, proof of residence, bank statements) and then within a couple of hours, we will tell you if you have been successful or not. If so, the amount paid out to you will be based on the value of your car (we will pay up to 50% of its value) as well as your income and expenditure. Of course, we do our utmost to make sure we reach the amount that you request.
All loan products have costs involved. A logbook loan is no different. There will be an annual percentage rate attached to the loan. This reflects the interest you will pay annually on the amount you have lent from us.
We not going to lie. Credit products for people who have a bad credit rating are more expensive than a loan product that you could access from a bank. But your bad credit rating will see you rejected time and time again.
Generally, the annual percentage rate for a logbook loan is around 400%. While this might seem expensive, in reality, it is to cover us as the lender. Remember, you do not have any credit checks when it comes to a loan of this nature.
Are there any perils associated with this loan type?
Again, we need to be straight to the point here. When you sign a logbook loan, your vehicle is signed over to the loan provider for the duration of the loan.
It is important to pay your instalments on time. Should you not do this, there is every chance of your vehicle being repossessed. This is well within the term of the contract. Unfortunately, some loan providers will jump at the opportunity to do this the very first time you default. Although they are technically entitled to do so, we don’t believe this is ethical at all.
If you miss a payment, we will contact you to ask you to pay as soon as possible. If you miss three payments in a row and ignore our calls and messages, then we may start to instill proceedings to repossess the vehicle and sell it to recoup our costs.
No matter which loan provider you choose if you are going to miss a payment, get into contact with them beforehand. Most will be able to suggest a course of action or restructure your loan to pin the missed payment on at the end. Don’t take the decision of not paying an instalment without letting anyone know in advance.
When it comes to deciding if a logbook loan is suitable, only you really know the answer as to whether you should apply for one or not. Simply put, if you have a car in good condition and you know you can make the payments each month, then as a bad credit sufferer, a logbook loan could give you the credit you need.