What is Logbook Loan?

A logbook loan is a loan that you can get against your vehicle. It means that for borrowing the money you can use your car as collateral, and a short-term loan direct lender will provide you with the cash you need. You can borrow an amount according to your financial requirements. However you can not get the money more than the worth of your car. 

However, the interest rate on short-term payday loans is high. Such types of loans are not very friendly as you can end up paying a high interest. There are different short-term loans direct lenders, so you must visit multiple lenders and select the one that offers less interest rate.

Eligibility Criteria for Logbook Loan

For having a logbook loan, a person must be a UK resident and 18 years old. You must own a vehicle that you can use as security against loan. Also, you have to prove that you are able to afford monthly repayments. You can get a logbook loan if your credit history is poor, but you can not get one if you are already in a debt management plan.The vehicle you are thinking to use as security, must be in good working condition.
You must have registration documents of the vehicle, and this vehicle must be insured.

How Does Logbook Loan Work?

The method of applying for a logbook loan is similar to other personal loans and includes a contract between borrower and the lender. But in this case you have to show that you own a vehicle and most probably the lender may ask to show the registration documents of your car. Typically, a person can borrow an amount between £500 and £50,000, and it depends on the value of your vehicle.
After providing complete documentation, you have to sign a bill sale agreement which means that the lender is now an owner of your car. However, you can use your vehicle as long as you make repayments of your loan.
You must have registration documents of the vehicle, and this vehicle must be insured.

Pros of Logbook Loan

  • With the help of an online financial service provider now it is very convenient to apply for a logbook loan.
  • You can get quick access to cash through this type of shorttterm loan.
  • This type of loan is an excellent solution for people who have bad credit history and can not take loans from banks.
  • You can get the cash even if you do not have any expensive jewellery as a security.
  • Furthermore, as you are using your vehicle as security, there is no credit check required, and people get the loan quickly

Cons of Logbook Loan

There are some disadvantages of logbook loans, and as a borrower you must be aware of them.

  • The main disadvantage is that the average percentage value is very high; that is why it becomes difficult for many people to meet monthly payments.
  • And when a person is unable to repay the amount, it may result in extra charges and at the end company or the lender repossesses your vehicle permanently.