Guide to Logbook Loans for Beginners
Most of us, if not all, have encountered unexpected emergencies and expenses at one time or another. Maybe you have overdue bills to pay, a medical expenses to take car of or a major investment you need additional capital for. Whatever your needs may be, borrowing money oftentimes is one way to meet said financial needs.
Getting approved for a personal loan if you have a good credit history is easy. But it’s a different story altogether when you have bad credit. In fact, you’ll likely get more rejections that you can manage when you have a bad credit score under your belt.
Fortunately, it’s not gloom and doom for borrowers with bad credit. A quick and easy solution for your needs is a to take out a logbook loans. You can do that at Simplelogbookloan.co.uk. But first, here’s what you need to know about the financial product.
What is a logbook loan?
A logbook loan, as the name suggests, is a type of personal loan where you use your vehicle as collateral. You still get to keep and use your car but you hand over temporary ownership to your lender. This means, your lender can and will repossess your car in the event that you cannot repay the loan back.
How much can you borrow?
Since logbook loans are secured loans, loan amounts offered are larger. You can borrow a minimum of £500 for overdue bills or up to £50,000 for other major personal needs. Lenders normally don’t require borrowers to disclose the reason for the loan. As long as you are eligible, you are welcome to apply.
How long can you repay the loan?
As for the repayment terms, you can repay the loan within 12 months or up to 36 months. Repayment is complete via direct debit deduction. Otherwise, a debt collector may be sent out to your address to collect your monthly dues.
What are the requirements?
Advertised with the promise of quick cash, it’s no surprise why borrowers are drawn to the financial product. Another advantage is the fact that requirements are pretty basic and straightforward.
To be eligible for a logbook loan, you must be of legal age, a resident in the UK and a vehicle owner. Your credit score is not a factor so whether you have a history of ccjs or defaults, you can still avail a logbook loan.
How much does it cost?
While fast and easy to avail, there are downsides to logbook loans you need to carefully consider. One is the high interest rate. It may offer the promise of quick cash but at a high cost.
The average representative APR for logbook loans, for example, is 400%. Compared to traditional personal loans that may take time to process, the financial product is a many times more expensive.
What are the risks?
You also have to think about vehicle repossession. Seeing that you secured the loan against your vehicle, there is always the possibility of losing your car hovering in the background. If at some point you can’t repay the loan, you may face repossession and probably another hit on your credit score.