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A Short Guide to Logbook loans
If you are looking for a fast and cost effective loan from a lender that you can trust, there are many ways in which you can go about it. You can turn to banks and other mainstream lending institutions that can provide you with a reliable loan. However, for these financing companies, it normally takes more than a week before a decision is made on a loan application and if you’re looking to borrow money fast, these might not be the ideal venues for you. With that being said, you might want to turn your attention to logbook loans and consider what these credit options have to offer.
What is a Logbook Loan?
These types of loans are quick credits that look on your vehicle as collateral. Taking out this loan, therefore, means that you are temporarily surrendering your vehicle to the lender until you have completely paid back the money that you have borrowed for plus its interest rates and/or other charges. And as long as you make the proper repayments, you should be able to use your vehicle back in no time.
How do logbook loans work?
The loans are typically available in primary business streets of towns and cities and also in the internet. The amount of money that you can avail for can range from a mere £500 to as much as £50,000, depending on the lender and on the value of the vehicle that you are offering as security. It is important to note, however, that the value of your vehicle will depend upon the lender’s own evaluation. Other lenders will lend up to the true value of your automobile while there are others who would only lend up to half of your car’s value.
Once you take out the loan, you will normally be requested to surrender your vehicle’s logbook or vehicle registration document, hence the name logbook loan. The documents will serve as proof of your ownership over the vehicle. And until you pay back the money that was lent to you, your handing the ownership of your automobile to the lender.
Taking out a logbook loan in the UK
For people residing in the UK, it is important to note that the loans are only offered in England, Wales and Northern Ireland. You can’t unfortunately avail them in Scotland and if someone offers you the credit there, chances are it would be a hire-purchase or conditional sale and not a direct loan so make sure that you go over the details of the deal and how it works carefully.
Aside from the main contract that you need to sign, your application would also include a separate form referred to as a ‘bill of sale’. This bill states that you are temporarily handing the ownership rights to the lender but you will be able to retain ownership and use after you complete all loan repayments. The bill of sale will only be legally binding once the lender registers it with the High Court. If he fails to do so otherwise, the lender will require a court’s approval to repossess your vehicle. Before taking on a logbook deal, be sure to go over the bill of sale first and find out whether or not it is registered.
Terms and Agreements
Depending on the lender, you can get the money that you need relatively quick but you may be charged with higher interest rates of up to 4%. Generally, you are given up to 78 weeks to pay back the loan. It is important to note, however, that you have the legal right to repay it earlier, if you can afford to, and retain ownership of your car faster. There are also loan deals that allow you to repay the interest charges until the last month of your contract. A month before the deal expires, you must then repay the full amount that was lent to you. Different lenders, therefore, provide different agreement terms to their costumers and it is pretty much up to you determine what works best for you.
Defaulting on Your Payment
If you decide to default on your repayment, log book companies have the legal power to exercise bailiffs and seize your car. This normally won’t happen, though, until you have missed out on several of your payment dues. The law also obliges lenders to send you a default notice first which gives you the right to enjoy 14 days to make a response.
What Do I Need To Do For Logbook Loans?
*Subject to lender approval and requirements.