What you need to know about logbook loans online
If you need to get your hands on some money quickly there are a number of different types of loans you can potentially take out. A logbook loan is a loan that is given to you by a lender using your vehicle as security. For the duration of the loan the lender owns your vehicle, but you are still able to drive it as normal. However you should note that you will have to hand over the registration certificate, or the logbook, to the lender until you have repaid the loan.
What are the benefits of a logbook loan?
If you need cash quickly for an emergency then an online logbook loan might be what you need, especially if you have a poor credit rating and you do not have the option of going to a mainstream lender in order to find the money. You can potentially borrow between £500 and £50,000, but the amount you will be able to borrow will depend on the value of your car and how much you can afford to repay each month. However you should note that some lenders will only allow you to borrow up to 50% of the value of your car, however each lender has it’s own criteria regards how much they are willing to lend.
This type of loan allows you to get hold of cash quickly, with no credit checks and you can find them both on the internet and also on the high street. You should also be aware that some of these loans are paid to you by cheque and so you should allow up to four days for this to clear. Most lenders are willing to secured loans against most vehicle types including motorbikes, vans and motorhomes.
The value of your vehicle must be adequate to provide security and some lenders will also consider logbook loans on older cars more than 10 years old.
How long do I have to repay the loan?
A logbook loan typically lasts for 78 weeks maximum and the way that most repayments work is that you pay interest only for the term of the loan and then the final payment you make is the repayment of the original loan amount. You should expect to pay interest at around 200% APR so you do need to be aware that you will be paying significantly more in interest than your loan value in total.
Calculate how much your logbook loan will cost over the period of the loan. Find out how much interest you’ll pay and what the monthly repayments will be for the term of the loan.
Before you apply for a logbook loan with one of the lenders above ensure you fully understand the cost of loan and that you can afford to meet the monthly ongoing loan repayments. Check that the loan repayments are within your budget before committing to the loan.
Things you need to be aware of
Until you have made every repayment on your loan there is the possibility that you could lose your car if you find that you cannot make your repayments. In order to qualify for the loan in the first place you will need a vehicle that has a value of at least £500 and you will also have to own it outright. You also need to be aware that the interest rates for logbook loans are much higher than other types of unsecured loans due to the perceived risk to the lenders as they generally do not conduct credit checks in order to assess whether you are likely to pay the loan back on time. Some lenders also do not accept Direct Debit so be prepared to keep a careful track on how much you still owe.