A sneak peek into logbook loans
Over the years, logbook loans have become very popular among UK citizens with a low credit score. Gone are the days when getting a personal loan was a daunting task especially if you had a low credit rating. With the mushrooming of logbook loan providers, people with a low credit score can now avail a loan without breaking a sweat as it were in the old days. With a logbook loan, all you need is to provide the car as security and you can get access to the cash you need urgently. However, in as much as logbook loans are the saving grace to individuals with a low credit rating, there are a number of things you need to be conversant with prior to applying for a logbook loan.
Getting your loan amount
It is imperative to note that your lender is most likely to advance you the loan amount by issuing you a check. This of course is a great disadvantage especially if you need the cash immediately as a cheque takes up to 4 days before it can mature. However, you need not to worry as there are lenders who will provide you the loan amount on the spot. However, the downside is that most of them charge service fees that may be up to 4% of the loan amount you have been extended.
Condition of your car
Not just any car can be accepted for collateral. Most UK logbook loan providers require that the car to be used as collateral be in good condition, be well maintained and be free from any financial attachment. While your car needs to be free of any financing, there are a number of lenders that accept a car with financing attached to it provided that the financial attachment is almost up or the outstanding balance is very low. The car that is accepted for collateral should not be more than 10 years on the road. Again, there is a silver lining for vintage cars or sport cars.
Inability to repay logbook loans
If for some reason you are unable to repay your loan, the logical thing to do would be to immediately contact your lender. Remember that your lender is the temporal owner of your car and failure to repay your loan means that you might lose possession of your car. However, lenders only repossess your car if you have defaulted paying your obligations for several months and efforts to communicate to you have been futile. Just keep in mind that your lender does not need a court order to sell your car as the bill of sale agreement you signed makes them the owner of your car. They can only resolve to go to court to sue you if the proceeds from the car sale are not sufficient to cover the loan amount together with the interest. The court will therefore prevail upon you to pay up the shortfall from the sale.