What is a logbook loan?
A logbook loan is a specific type of loan designed to help people with cars get access to loans. Using your car as collateral, a direct lender will provide you with a loan. How much you can borrow depends on your needs and how much your car is worth. The more your car is worth the more money you can borrow. However, some lenders will only allow loans totalling up to half of your car’s value so it is always recommended you check which lenders best meet your needs. In addition, most reputable lenders will require you to get your car independently valued.
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Logbook loans take their name from the logbook of your car, this being your vehicle’s registration document, and which serves as proof that you are the registered keeper of the car. When you take out a logbook loan, you will be asked to give your vehicle’s logbook to the lender. If you live in England, Wales or Northern Ireland you will have to sign a credit agreement and a form called a ‘bill of sale’. This means that the lender will temporarily own your vehicle. You can, of course, continue to use your car as normal and when the loan is repaid in full, the lender will return the log book to you and the car is yours again. Logbook loans are usually paid by cheque and take several days to clear. Whilst some lenders may offer a quicker cash alternative to this, there are likely to be fees involved.
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What is the best logbook loan for me?
There are various types of logbook loans available, with many now found online. The majority of these loans are usually required to be repaid within approximately 18 months. However, this can often be tailored to suit your requirements, including the option of repaying it back earlier. Furthermore, some lenders only require you to pay the interest on the loan each month; with the amount you borrow to be repaid at the end of the agreed loan period.
Whatever type of logbook loan you require, our partner can help you find the best deal for you from some of the most trusted and respected lenders currently operating in the UK. Whilst these loans can be a useful way of getting the money you need, as with all loans you must exercise caution. First, you must ensure that you fully understand the terms of any loan you take out, as well as be able to afford the repayments. In addition, because of the relatively short repayment time of logbook loans, many feature higher APRs than longer-term loans. As such, it is recommended that you only take out a logbook loan if you are fully certain that you can make the repayments as failure to do so could lead to financial problems, including the loss of your car.
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