How do logbook loans work?
No one loves to be in a position where they are helpless and always getting the short end of the carrot stick. Over the years, having a poor credit score has always been the bane of all problems especially when one is seeking to get approved for a loan. It is the reason why providers in the UK that do not dwell on credit scores for approval or rejection of a loan application have become very popular. The term logbook loan is not new in this regard. It has gained immense popularity and has been the saving grace of many UK citizens with a poor credit rating.
What is a logbook loan?
From the name, a logbook loan is a loan where your car is used as security before you can be extended the loan. With a logbook loan, you no longer need to sell your car to get access to the much needed cash. You simply need to set up your car as collateral and get access to the amount of money you so need. The good thing about logbook loans is that even though the ownership of your car is temporarily taken up by your lender, you still are able to continue using your car until such a time when you have finished repaying your loan.
How logbook loans work
Application for a logbook loan can be done online or from a brick and mortar office. The amount of money you are eligible to borrow is dependent on the value of your car. Generally, most logbook loan providers require that you borrow the maximum amount up to 50% or 70% of your current car value. This is simply to ensure that should you be unable to furnish your logbook loan, then the proceeds from the sale of your car should be enough to cover your loan balance.
When you make an application for a logbook loan, you will be needed to hand over your car registration and logbook. Your lender will then evaluate the value of your car so that you can know the maximum amount you are eligible to apply. The evaluation is also done to ascertain whether the car is eligible to be used as collateral or not. If your car is in good condition and have provided all the required documentation, you should be able to have your loan approved within hours.
What you need to know prior to applying for a logbook loan
Before you apply for a logbook loan, it’s essential that you know it can be very costly. In fact, it is more costly than the average loans and therefore it’s important that you pay it off in the soonest time possible. Check the APR being offered prior to applying for a logbook loan. You should make efforts to compare the APR and apply with a lender who offers the best APR rate. Secondly, you need to read the fine print prior to applying for a logbook loan. This is simply to avert a situation whereby you pay a fine for early repayment. Thirdly, you need to find out the mode of payment that your lender prefers. If you feel like the mode of payment they prefer is not okay, then you can always negotiate or simply find a suitable lender.