Logbook Loans
Explained
What is a logbook loan?
What is it?
A log book loan is, in simple terms, a personal loan where borrowing is arranged against the value of your car.
The loan can be offered on a ‘same day’ basis to the car owner, the person who is the registered keeper. Although no credit checks are required, applicants need to demonstrate that they have adequate income to cover the repayments. The car will also need to be less than eight years old; of sufficient value; taxed and insured with an valid MOT and; not subject any finance agreements. The lender will hold the log book for the vehicle for the duration of the loan whilst you continue to drive your card as normal.
Pros
No credit check is carried out so your financial history has no impact on your application. Access to borrowing is quick as the loan is available on a ‘same day’ basis. You continue to have full use of the vehicle whilst repaying the loan.
Cons
Because lending is arranged over a relatively short term, the time which you pay back the debt, interest rates can be high. The amount that can be borrowed is based solely on the value of the car, not your ability to repay. Failure to maintain payments could result in you loosing ownership of the vehicle.
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