Advantages of a Logbook Loan

Despite what other financial experts say about logbook loans, the financial product continues to attract a large number of borrowers across UK for several reasons. Not only does the loan bridges the large gap in the market but it helps borrowers meet a wide range of financial needs and emergencies. If you’re thinking of taking out this type of financial product, here are a few advantages that makes it a better option than other high risk loans such as payday loans.

Fast approval

More and more logbook loan lenders are now promising same day approval for their loan deals as a way to lure more customers to apply. This means that if you need quick cash, you can avail a logbook loan and meet any financial need within the same day you applied. To guarantee fast approval, just make sure you are eligible for a logbook loan and you meet the eligibility criteria. It would also help if you prepare the needed requirements prior to completing an application form. Among the documents your lender will need include your vehicle’s V5 document, MOT certificate and insurance details among other things.

Large loan offers

With logbook loans, the loan amounts are also larger because of the security requirement. In most cases, you should be able to borrow between £250 and £50,000. The maximum amount your lender can lent you will depend on your car’s official value but in general, it is set around 70% of said value. With the large loan offers, borrowers are able to meet a wider range of financial needs. Whether it’s just an overdue bill or a major medical expenses, you can count on logbook loans to give you a quick cash solution you can easily avail. To compare the best logbook loan deals available in the market today, go to http://www.eaffylogbookloans.uk

Longer loan terms

It also follows that logbook loans come with longer and more flexible loan terms. The typical repayment term for a logbook loan starts from a few weeks to 36 months. The term will depend on what your lender offers but you can also tailor made it according to your loan amount and financial capability. If you need a longer time to repay your loan then you can opt for the maximum repayment term available. If you want to pay the loan fast, you can also do that. Either way, logbook loan lenders are more flexible with terms than other lenders offer unsecured personal loans.

No credit check

But more than the larger loan offers and longer loan terms, the fact that there’s no credit check with logbook loans is its biggest advantage over other types of personal loans. With no credit check means anyone with bad credit can avail the loan. Your credit score will not affect your approval. In fact, your application is considered approved provided that you are eligible and you meet all the loan requirements. In most cases, you can expect to get approved in as fast as a coupe of days or even within 24 hours for some lenders.

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Important Things For Logbook Loans

Things To Know About Logbook Loans

There are plenty of personal loans available in the UK. The problem is when you have a poor credit score, you’ll have a hard time getting approved for a loan especially when you need it. In this case, this is when logbook loans may be helpful. While accessible, logbook loans can be risky too. This guide will help you determine whether a logbook loan is suitable for you or not.

What are logbook loans?

Logbook loans are personal loans secured on an asset, in this case, the borrower’s vehicle. It is a type of secured loan where you can cash in on your vehicle while still keeping it. The financial product is widely available in the UK especially among borrowers who get rejected by major lenders due to their less than stellar credit rating.

Who can apply for a logbook loan?

If you live in the UK, you are of legal age and you’re a vehicle owner then you can apply for a log-book-loan. With the security requirement, logbook loans are usually easy to get approved for. Providers won’t consider your credit score hence ideal if you have a bad credit rating. You have to be employed with a steady stream of monthly income to be eligible.

How much can you borrow?

With logbook loans, loan amounts are larger than what unsecured loans offer. In most cases, providers offer loans from £500 up to £25,000 maximum. The amount you can borrow will be affected by two major factors, your income and your vehicle’s trade value. As for the repayment terms, you can repay the loan from 12 months up to 36 months.

How much does a logbook loan cost?

Logbook loans may be quick to access but it can be really risky and expensive. The typical cost of a logbook loan is represented by its 400% APR on average. Most of the time, the rep APR can be even higher than that. The rep APR essentially covers your loan’s total cost including interest rates, admin fees and other related charges.

For example, if you borrowed £850 at 450% APR and you want to repay it over the course of 18 months, you’ll end paying a total of £2,533 by the end of the term or that’s about £141 per month. As you can see, the amount of interest you’ll be paying is significantly more than the original loan.

How logbook loans work?

When you apply for a logbook-loan, you are essentially taking out cash from your vehicle. Your provider won’t get your car in exchange for the cash you need. Instead, you get to keep your car but ownership has been transferred to your lender until you’ve repaid the loan in full. You’ll be asked to sign a debt agreement along with a bill of sale document. This means that you agree with the terms that your lender can repossess your vehicle if and when you are unable to repay the loan. The bill of sale then allows your lender to sell your car if you are unable to update your payments after repossession.

Are logbook loans right for you?

Because logbook loans are risky and costly, deciding on whether to apply for one should be carefully planned. First, you need to make sure it’s the right type of loan deal for you. Secondly, you need to make sure you can commit to timely repayments each month. And finally, you need to plan your borrowing. Apply only for what you need and you can afford.

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Beware Logbook Loans On Second-Hand Cars

Most of us drive second-hand cars because we're not made of money. There's a whole load of pitfalls when buying a car that isn't new, but one is often overlooked and particularly troubling.

Drivers could well inherit debts which have been taken out by previous owners of the vehicle you bought, which means you could see your car being seized, when it isn't your fault.

Eaffy Logbook-loans have sent out a warning after stating that one in five people who reported a problem to them about logbook loans, they ended up having their car repossessed despite not borrowing the money themselves.

What happens is, someone takes out a logbook loan and they put their car up as security. Like using a pawnbroker, the full ownership of the car is retained by logbook loaner until the debt has been paid off in full.

Eaffy Logbook loans have warned that you might buy a car that is still the subject to an outstanding logbook loan taken out by the previous owner and you, who have done nothing wrong, ends up being chased for the debt.

There's an estimated 60,000 logbook loans to be taken out this year, which is a 61% increase on 2011. The CA survey regarding drivers who had bought a second-hand car found that 63% did not check if the car had an outstanding loan.

As such, they'd like to see the law changed so that the car cannot be taken if the owner is not the original borrower. The person should own the loan, but the thing they put up as security.

Sadly, at the moment, there's no way of telling whether or not the car you're buying has a logbook loan attached to it, which is why it has become such a problem.

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Why Logbook Loans Are a Low Cost Borrowing Option

You may not be fully up to speed on what a logbook loan actually is. Well basically, it is a loan that is secured against your vehicle, and the finance company keeps hold of the vehicle logbook for the duration of the repayments. The logbook (or the V5) is a document that contains the details of the vehicles current owner, the engine number, the VIN number and registration number.

When acquiring a logbook-loan, the company providing the loan, takes possession of the logbook, but the person taking out the loan, is allowed to keep using the vehicle. However, failure to keep up with the repayments means that is very easy for the finance company to repossess the vehicle in order to sell it on. That is why it is important to make sure that you have enough money to meet the financial commitment of taking out the loan, or you may end up waving goodbye to your treasured vehicle.

As stated earlier, there are other ways to obtain credit, especially if you are in need of credit in the short term. However, these tend to take on the form of payday loans, and these have a very high rate of interest, plus, you can only borrow a certain amount based upon your next lot of wages. People who have taken out payday loans tell of being caught in a spiral that requires them to take out further loans in order to pay off the initial loan.

Payday loans are suitable for some people but are to be avoided if possible, and logbook loans make more sense, as the companies who provide logbook loans tend to make sure that the person taking out the loan can afford the repayments.

With the current low interest rates, it is a good time to take out a loan, however, this does not stop some loan companies charging extortionate amounts of interest, and typically the shorter the loan period, the higher the interest. Payday and doorstop loan companies are among some of the worst for charging very high rates of APR.

Another advantage that log-book-loans have over other methods of credit, is that you do not need to go through the problem of having your credit history examined. This can be a stumbling block to many people’s credit applications, and it can be a waste of time even applying for certain loans if you have CCJ’s or defaults on your credit file.

Plus with payday loans, you can only borrow a certain amount of money against your next pay packet, and this can mean that you are not getting the amount of money that you need. However, with a logbook loan, the amount you can borrow depends on your car, its age and condition.

Hopefully you now have a better idea about the advantages of logbook loans compared to other kinds of loans. There are many companies out there who are in a position to offer you a logbook loan, so you should not find it too difficult to find one that suits you.

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PROS AND CONS OF A LOGBOOK LOANS

There is no denying the fact that logbook loans have gained increasing popularity over the years. More  and more borrowers are turning to the loan type for quick fix solutions to their cash problems. But at the same time, logbook loans have also gained a lot of flak especially from financial experts. Because of its high  interest rate, experts warn borrowers from getting one. Others recommend extra caution. In any case, it is very important to know the pros and cons of what you are getting into. Below are more details about what to expect when applying for a logbook loan:

LOGBOOK LOANS PROS

Logbook loans are popular especially for people with bad credit because of the following advantages:

EASILY ACCESSIBLE

More lenders are now offering logbook-loan deals online which mean that the loan product has never been more accessible. To avail the loan, all you need to do is make sure you are eligible. You can then apply online and expect approval confirmation quickly. Before applying, however, it is imperative to do your homework. Research your lenders and make sure to pick one with a solid track record.

FAST APPROVAL

Provided that you meet the requirements and have the necessary documents handy, you can expect for fast approval. Some lenders are even promising same day approval services. With stiffer competition in the lending industry, fast approval and convenience are lenders' ways to convince borrowers to sign up.

FLEXIBLE LOAN AMOUNT

Since logbook loans are secured against a vehicle, the loan amount is more flexible that what unsecured loans such as payday loans offers. With a logbook loan, you are welcome to borrow from £250 up to £50,000. It also means that logbook loans can meet a wider range of financial needs. Whether it’s for home renovation, vacation or a medical emergency, logbook loans make an ideal financial solution.Flexible Loan Term

FLEXIBLE LOAN TERM

Also equally flexible as the loan amount is the repayment term for log book loans. You can opt between 3 months up to 3 years of loan term depending on what you can comfortably afford per month. The loan product gives you the freedom to tailor your loan set-up according to your personal circumstance so the likelihood of default is lower.

NO CREDIT CHECK

Of the log-book-loan advantages, the best on the list is the no credit check policy. While other personal loans require you to have good credit, logbook loans do not mind your credit score. As long as you have a car to serve as collateral, you can avail of the loan and therefore meet any pressing financial need.

   LOGBOOK LOANS CONS

But logbook-loans are not without its disadvantages. Three of the common cons you should know about are the following:

HIGH INTEREST RATE

One of the most common complaints experts and borrowers alike have about log book loans is the high interest rate. Compared with traditional personal loans, logbook loans charge hefty and sometimes excessive interest rate. The average Representative APR for the loan product is at about 400% which is several times more than loan options for people with good credit.

DEBT TRAP

Then there's always the debt trap problem. If you're a borrower with bad credit, it is very easy to fall prey on the cycle of borrowing money to meet your array of financial needs. If this happens, there is the likelihood of putting your credit score at an even greater risk of being bad. When you borrow money, it is very important to take extra caution. Borrow only what you need and make sure to repay the loan back on time.

REPOSSESSION

Like with any secured personal loans, the worst thing that can happen to you is repossession in addition to a huge hit on your credit score. When you signed the debt agreement, you are essentially handing over temporary ownership to your lender. That means that if the lender has the bill of sale to your car, they have the right to repossess your vehicle as per the agreement. Repossession is usually the last resort and it happens when you missed payments for a number of successive months. This is also after your lender contacted you and you didn’t made new arrangements.

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Stockport Logbook Loans UK

If you’ve got a bad credit profile and you’re looking for a loan then chances are that during your search you’ve come across logbook loans. Logbook loans work on the basic idea that if you own a vehicle you can secure it against a loan. The reason they are called Logbook loans is that the logbook (your vehicle registration certificate, also known as your V5) is taken by the lender for duration of the loan term, temporarily resulting in the lender owning your vehicle.

What not to do 

Logbook loans are designed as a solution for those with bad credit. If you have a perfect credit history then you are in the wrong place. You will be able to get much better rates by applying for either a bank or supermarket loan where you will have access to APR’s of less than 10%. 

Pricing and things to watch out for

As Logbook loans are aimed at those with bad credit the rates are generally quite high,ranging from 178.2% APR to 498%. Loan terms are relatively short, ranging from 6 months to 3 years with loan amounts between £300 and £50,000. The value of the loan you’re able to get with a logbook lender will depend on the value of your car. In some cases outstanding finance on your car can be deducted from the overall value of the loan offered but this will depend on the value of your car.

Note that Logbook lenders take your V5 when you agree your loan. This makes them the registered keeper of your vehicle for the term of the loan and if you miss even a single payment, your car can be sold very quickly and without going through a court process. This puts logbook lenders into the lender of last resort category and it goes without saying that it’s absolutely imperative that you ensure you can make the repayments before committing to taking out a logbook loan.

Acceptance criteria

Logbook lenders do not discriminate based on your credit score, all they require is that you own a vehicle. If you’re considering a logbook loan and own a specialist vehicle it’s worth noting that each individual lender is different and will have varying restrictions to what vehicles they accept. Some lenders for example do not accept ‘prestige’ or ‘classic’ cars - bottom line, do your research and compare lenders before applying. 

Final word

If you have a poor credit history and are looking for a personal loan then a Logbook loan is worth considering. Logbook loans do however come with a severe health warning. Whether or not you rely on your vehicle to get yourself to work or for the daily school run by committing to a logbook loan you’re putting your vehicle at risk. Therefore before applying for a logbook loan be sure you can safely meet the agreed repayments. If in any doubt, do not apply.

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