If you’re of legal age, a resident in the UK and a vehicle owner, you’ve probably heard of logbook loans at one point or another. You might even have considered taking out said loan yourself. It’s easy to avail and quick to process plus it guarantees flexible terms too. There are just some downsides though. Logbook loans are expensive and risky. If you’re thinking of getting one anytime soon, here’s what you need to know about the financial product.
What are logbook loans?
Logbook loans are not your typical car loan. With traditional car loans, you are financing a car purchase. With logbook loans, you are using your car to secure a personal loan. Logbook loans, in other words, are secured personal loans where you put your car as collateral.
Who is it for
Logbook loans are designed specifically for people with bad credit. If you can’t get a personal loan elsewhere because of your bad credit score, resorting to logbook loans is a quick and easy way to get a good handle on your financial needs.
With logbook loans, there are no credit checks involved. That’s one major thing not to worry about when applying for a loan. This also means that processing often takes less time, typically within a day or two. As long as you meet the requirements and have the needed documents handy, you can almost always expect approval for your loan.
You can also use the loan any way you want. From overdue bills to rent payment, home renovation, school tuition and more, a logbook loan can meet a wide variety of personal loans. And you’re welcome to take one out as long as you’re a vehicle owner in the UK.
How much can you borrow?
Because the personal loan is secured against your vehicle, the amount you can borrow is more flexible than if you settled for an unsecured personal loan. At http://www.simplelogbookloan.co.uk/, for example, you can borrow between £500 up to 50,000, which you can use to meet a wide array of financial needs.
The loan amount can be repaid in 12 up to 36 months. Payments can be made weekly or monthly depending on how you want the loan set up.
What are the requirements?
As mentioned, the requirements for a logbook loan are pretty basic and straightforward. One, you must be of legal age, a UK resident and a vehicle owner to be able to avail the loan. Your credit score doesn’t matter since there is no credit check ran on applicants. That means a speedy processing most other time. But to further expedite your loan approval, make sure to prepare the following documents beforehand:
. V5 or logbook document
. MOT certificate
. Insurance details
. Proof of identification
. Proof of billing address
. Proof of stay income whether you’re self-employed, working part time or full time
How risky are logbook loans?
At this point, logbook loans are looking pretty enticing as a quick cash solution to your financial troubles. And they are but with a hitch. In exchange for the fast process and flexible loan amounts, logbook loans are quite expensive. In fact, some experts slam the financial product especially for its steep interest rates. Add to that the risk of vehicle repossession and you have one very high-risk loan option on your hands.
Despite the cost and risks, logbook loan remain a viable loan option. Just remember to follow the simple rule that works every time and that is to borrow only what you need and what you can afford to avoid consequences.