How Do I Get A Logbook Loan?

How Do I Get A Logbook Loan?

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Logbook loans are means of borrowing money by using your vehicle as security. This vehicle is usually a car, and you have to hand over the ownership to the lender until you repay all the amount. However, you are still able to use your car, but if you do not repay the amount on time, the lender has the right to sell your car and get the loan amount. A logbook loan is a simple and easy way to withdraw money from a vehicle without going through a hard credit check. The amount you borrow depends on the worth of your car. 

Many direct lenders and brokers are providing logbook loan services. But before applying for a loan, you may have many questions about a logbook loan, such as how it works, its cost, application process and repayment terms. Let’s answer all these questions. 

How Does A Logbook Loan Work?

Logbook loans are available online and at the high street lenders. Typically, you can borrow an amount from £500 to £5000, depending on the market value of your vehicle. It is a convenient way to get finance if you have a vehicle and find it difficult to get credit from elsewhere due to bad credit history. With a logbook loan, you have to sign a credit agreement, and bill of sale, and the lender provides you copies of these agreements. A bill of sale is a certificate to transfer the vehicle’s ownership to the lender. The lending criteria varies from lender to lender. However, the lender asks you to show the vehicle’s registration document, which will prove that you are the car’s owner. 

How To Apply For Logbook Loan?

In this digital era, with the development of new technologies, everything has become easier. Now you do not need to go to the loan providers. You can find many online logbook loan providers. The application process is quite simple and easy. Every lender has a loan application on its website, and you have to fill this application. You can get an instant quote after providing the necessary information. This information includes your personal information, your regular expenses and your income. The loan providers usually conduct a credit check to find out your affordability. With the affordability check, your loan application process is completed online. Once the loan is approved, your money is transferred to your bank account within hours. 

How Much A Logbook Loan Costs?

As we described earlier, logbook loans are designed for people having a poor credit history. Having a bad credit score means you are a high-risk borrower. It means that logbook loans can be extraordinarily expensive. The interest rate on logbook loans ranges from 100% to 500% annual percentage rate. With a loan term that varies typically from three months to five months, such loans get very expensive. Many comparison sites are available that allow you to compare logbook loans from different providers. You can also get instant quotes and decide whether you can afford to repay the loan or not. 

Benefits Of Logbook Loan 

Though logbook loans have a high-interest rate, they do come with the following benefits:

  • You can borrow a large amount up to £50,000 depending on the value of your vehicle.
  • The interest rate of a logbook loan may be higher than traditional loans. But it comes with a lower interest rate than payday loans. 
  • This type of loan offers you a flexible repayment option, and you can return it in monthly instalments. 
  • The borrowers do not have to go through any hard credit checks. 
  • Most logbook loan lenders do not charge an early repayment fee, but you should check the terms and conditions before borrowing money. 

Drawbacks Of Logbook Loans

Before taking a logbook loan, you must consider its drawbacks.

  • There is a risk of losing your vehicle if you do not repay on time. 
  • You must be the legal owner of the vehicle that is worth at least £500 otherwise you can not get a loan. 
  • The interest rate is much higher than the conventional bank loan.

Whether you want to take a logbook loan from main street lenders or online lenders, you must consider its positive and negative aspects. Moreover, you should get quotes from different logbook loan providers and select the one that offers a competitive interest rate. 

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