Logbook Loans Explained

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When it comes to quick cash solutions to a wide range of financial problems, logbook loans offer a fast way out. You just need to be a vehicle owner in order to avail a personal loan from £500 up to £50,000, which you can use for any personal need. But before you go on and complete a logbook loan deal, understanding how the financial product works will immensely help. Here’s your quick guide to logbook loans:

What are logbook loans?

Logbook loans are personal loans that are secured against the borrower’s vehicle. This means that you can borrow a larger loan amount but with a caveat. Since you’re putting your vehicle as collateral for the loan, there’s always the possibility that you may lose your car along the way. It doesn’t have to happen, however, if you’re a responsible borrower who sticks with borrowing only what you can afford to pay.Click here for more information about logbook loans.

How it works?

When you apply for a logbook loan, what happens is that you, as borrower, will essentially hand over temporary ownership of your vehicle to your lender. Your lender will not keep your car only your vehicle’s V5 documents along with other requirements such as MOT certificate, insurance and more. You’ll also have to sign a “bill of sale" document, which allows your lender to sell your car after repossession.

With the “bill of sale,” lenders justify their business move to repossess your car then resell it to cover for your outstanding balance. In case of nonpayment, you should be ready to lose your car. Repossession, fortunately, is often the last resort for most lenders. If you can contact your lender and make a new payment arrangement, your car is safe from repossession. In any case, it is worth nothing that ownership of your vehicle is with your lender once you are approved for a logbook loan.

Is it for you?

Logbook loans are accessible personal loans specific for people with bad credit. If you have a poor credit score and it has been preventing you to avail a suitable personal loan then getting a logbook loan makes good financial sense. Just remember that like with any other loan, there are financial risks involved. You should know exactly what you’re getting into before you sign a deal especially with logbook loans. It is a secured loan and there’s always the possibility of repossession. To avoid losing your car, it would be best to keep your borrowing within your budget.