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In the UK, thousands of individuals struggle to get approval for a traditional loan due to their bad credit history or low income. So you may look for alternatives to traditional loans to meet your financial needs. Secured loans are good alternatives to conventional loans, and you have to use your valuable assets as collateral. Logbook loans online are secured loans that are becoming popular.
They allow you to take out a loan by using your vehicle as a security against the loan. It could be a solution to your problems; if you do not have knowledge about this type of loan, read on to learn how it works and how you can get it.
Logbook loans are means of borrowing money by using your vehicle as security. This vehicle is usually a car, and the logbook lender legally owns your vehicle until you repay all the amount. However, you are still able to use your car as long as you are making repayments on time, but if you default on the loan, 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 value of your car. Many direct lenders and brokers are providing logbook loans online. But before applying for a loan, you may have many questions about a logbook loan, such as how it works, its cost, the application process and repayment terms. So let’s find the answer to all these questions.
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 convenient 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 with copies of these agreements.
With the development of new technologies in this digital era, 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 out 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. Many logbook loan providers in the UK offer different loan terms and rates, so you must shop around to find the best logbook loan deals. This way, you can get a loan at an affordable rate and your required terms.
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 lenders and help you save time and energy. You can also get instant quotes and decide whether you can afford to repay the loan or not.
In recent years, logbook loans have become very popular among individuals in the UK. More and more borrowers are turning to this funding source to fix their cash flow problems. There are numerous reasons why this type of loan can be the best solution for those looking for quick access to funds.
“ Let’s have a look at logbook loan benefits to know why it is becoming so popular:”
The most significant drawback of a logbook loan is the high-interest rate. In addition, it is an expensive way of borrowing as compared to other personal loan alternatives. With an annual percentage rate of up to 400%, finance experts find it a costly option, so you should consider it as a last resort.
As logbook debt is a type of secured debt and you have to use our vehicle as security, there is always a risk of repossession. If you are not able to repay the loan amount and default on the loan, the lender has the right to sell your vehicle and get the loan amount back.
It is easy to get trapped in a debt cycle with high-interest funding options like logbook loans. If you already have a bad credit score, you will be trapped easily when you borrow more money to fulfil your financial needs. It is because you have an additional repayment that can create more issues for you. Therefore, you should only borrow what you really need and afford to repay.
If you have already taken a loan against your car, you can not use it as a security to take out a logbook loan. This is because the vehicle you are using as collateral has to be finance free to meet the eligibility criteria of logbook debt.
If you need quick access to funds and do not want to pay a high-interest rate, a money transfer credit card can be suitable. Many credit card providers offer an interest-free period on money transfers. They send money to your bank account, and you can use it for almost any required purpose. Mostly you can use a 0% interest rate credit card for up to 3 years maximum. However, it may not be a good option for you if you have a bad credit score as it can be difficult for you to repay the loan amount, and also, you may have to struggle to get approval for a credit card.
If you struggle to get a loan from banks or traditional lenders due to your credit score and legally owning a vehicle, a logbook loan can be a perfect option. You can use your vehicle as collateral to borrow money and also continue to use your vehicle during a loan as long as you are making timely repayments.
You can apply for logbook loans online without any hassle and get quick access to funds compared to traditional funds. However, you should look at the drawbacks like high-interest rates and risk of repossession before making a final decision. We suggest you make a price comparison to find the best logbook loans and only take out a loan if you can afford to repay them.