Every day, more and more people are turning to short term personal cash loans to pay for things like emergency health care bills or repair costs. There are a number of ways you can obtain a short term, personal loan; with logbook loans being one of them. But how do logbook loans work? You probably already know you need to do your research before taking out any kind of loan, and that’s why you’re reading this guide. Well done! Here’s a the beginners guide to help you:
What Is A Logbook Loan?
A logbook loan is a short term loan, that requires you to put you car down as collateral (to secure the loan). This type of loan is a good option for anybody who may not have the best credit rating or a history of missed payments.
Putting your vehicle down as security for the loan will give the company confidence that you fully intend to pay the money back. The car you use must be in your name for you to take out the loan, otherwise you won’t qualify.
Do I Have To Give Up The Vehicle There and Then?
Most of the time, logbook loan companies will not take your vehicle away from you. They are aware that people need their cars on a daily basis so they would not simply take the car off you and hand over your money. That being said, putting your car up for collateral means that the company are well within their rights to take your car away if you fail to pay back the money you owe. When you get your logbook loan, you will usually just hand over your MOT certificate and logbook – meaning that they will own your car until the money is repaid. You may then have to sign a bill of sale to say that the lender temporarily owns your car.
You’ll need to check with the specific company that you are planning to borrow money from for their exact policies.
Can I Apply Online?
Most logbook loan companies do allow you to apply online, however; you will need to take your car in for an appraisal as the amount of money you borrow depends on the value of your car.
How Much Money Can I Borrow?
It totally depends on the value of your car, which is decided after the appraisal. However, you can usually borrow anything from £200-£25,000 providing your car is worth that much.
What Are The Advantages and Disadvantages Of A Logbook Loan?
Logbook loans can give you fast cash, and are good if you have bad credit as companies won’t usually want to perform a credit check.
The downsides of a logbook loan are quite serious, as you really could lose your vehicle if you fail to repay the loan on time. The interest can also be very high, much higher than normal, unsecured loans. This means that you could end up in even more debt!
Make sure you can pay back the loan company before agreeing to take out a logbook loan!