Log book loans have been around for a while now, but they have only recently begun to gain popularity on a large scale. There are many people who are not entirely sure what log book loans are or how they work. Let’s take a look at the key points you need to know if you are considering this type of loan.
Let’s Talk Basics
Log book loans get their name because the borrower must surrender their x’s log book as collateral in order to secure the loan. This means that the lender will be able to take ownership of the vehicle in the event that the borrower fails to keep up with repayments. The borrower is still able to use the vehicle as normal during the term of the loan.
Essentially a log book loan works in the same way as any other secured loan. The car acts as security and it is possible to borrow around 75% of the vehicle’s current value. Since the lender has this security, these loans are commonly offered to people who have bad credit which stops them getting loans from traditional lenders.
It is fairly common for interest rates to be a little bit higher than with a traditional secured loan, but not as high as other borrowing options such as payday loans. The loans are commonly offered short term over a maximum of 3 years and do not usually require a credit check.
Meeting The Criteria
Those looking to apply for a log book loan usually need to meet the following criteria:
ñ Be over 18 years of age – although some lenders do specify that applicants must be 21 years old.
ñ The lender must be the legal owner of the vehicle.
ñ The car must not be under any other finance agreement.
ñ All relevant documentation must be produced at the time of application.
The Advantages of Log Book Loans
Log book loans do come with a number of key advantages. One of the most popular being that they are accessible to any car owner. It does not matter what sort of state your credit history is in or what type of car you own. As long as you can provide the log book and ownership papers, and are in a position where you can meet the repayments you will be considered for this type of loan.
Another of the popular benefits is that the application process is usually very quick and simple. It generally consists of a single form backed up with the relevant documentation. In many cases it is even possible to get a same day decision and get the money instantly on approval. The terms are also fairly flexible with loans offered over anything between 3 and 36 months depending on the total amount borrowed. The loan amount is usually based on the value of your car.
If you are looking for a quick and easy loan, but you do not have a very good credit history then you might find that a log book loan can provide you with an ideal solution. The application process is easy and most car owners are eligible. However, it is essential that you are comfortable with your ability to meet the agreed repayments because if you default on the loan you will forfeit your vehicle.
The founder of Loansforbad-credit.co.uk Hugh Tyzack is an expert when it comes to loans and finances, if you need help getting a logbook loan click here to find more details. You can find Hugh on @badcreditloans8 and Google+