How to Get the Best Deal for Your Logbook Loan

Sometimes unexpected events just come up and leave you in need of a quick short term loan. Sometimes you are left stranded wondering where you are going to get a hold of the cash you need. This is even more difficult if you are thinking of taking a short term loan but you have a bad credit rating. Luckily there are a lot of financial institutions out there with varying terms and conditions and options. One of those options is taking a logbook loan.

While doing so, all you will be required to do is walk into one of the branches of your logbook loan provider and hand in your V5 document. Once approved the money is disbursed within a very short time and the whole process is quick and easy. You can borrow as much as you need and many times you will be able to repay the loan within a month or two.

If during such an unexpected event you do decide that the best option for you is to take a logbook loan, you should know that the amount you are eligible for is to a large extent dependent upon the value of your vehicle. It is important therefore in order to secure the best possible deal for yourself, to be able to maintain your car in the best condition. Let’s now look at how you can do this:

  • Always keep the car well serviced and repaired. A car that has a lot of broken parts and is not in top form will not attract a good price when you are trying to sell it and that goes the same way when it comes to securing a logbook loan. Always carry out regular maintenance that way when submitting your application for a logbook loan, you will be able to get the best value for your car.
  • Ensure that your car has passed its MOT. Getting your MOT certification is fairly easy provided your car is in top form. Failing may mean that your car is not road worthy which will have a drastic effect on its value. Maintaining the vehicle in top condition will help with its MOT certification and improve your chances of getting a logbook loan.
  • Brush up on your paperwork before applying for a logbook loan. By having all the necessary documentation ready, such as the V5 registration document, proof of citizenship and proof of your ability to pay back the amount mainly through bank statements and pay slips, you will play your part to help speed up the process and get your money within a relatively short time.

When taking a logbook loan, ensure that you understand fully the terms and conditions on the loan such as your repayment period, the interest you will be paying back, the periodic amounts you will be paying and the consequences for not paying back your loan on time. To take the logbook loan you will need to be the legal owner of the car and it has to be more than 500 pounds in value. Short term loans usually have high interest rates and you need to be sure you can repay the full amount.

Make sure your lender is a member of a trade body and adheres to its code of practice and conduct and keep in mind the cons of taking a logbook loan in mind at all times. These are;

  • You lack the same consumer protection as found in a hire purchase agreement
  • It’s easy to lose your car in case you can’t pay back the logbook loan. When taking the loan, you hand over ownership of the car to the lender.

That said, once you are well versed in the conditions surrounding and necessary to take a logbook loan, you can go ahead and apply for one as it may be a sure fast way to get you out of your current situation and help you sort out your short term issues.

Important factors you should know about logbook loans

Logbook loans are fast becoming the loan option of choice for those of us who suffer from a bad credit rating but still own a car. Unfortunately, in today’s economic climate many people are falling deeper and deeper into debt. This means they often default on their debt which in turn drops their credit rating significantly.

And if you are in that situation, if you need a credit product of some form, be it a loan or perhaps even a mobile phone on a contract basis, you simply will not be approved. But there is hope for those suffering from bad credit and one of those solutions is a logbook loan.

In this blog, we will be looking at a few important things you should know about logbook loans so you can know what to expect when you apply for one for the first time. Having the knowledge beforehand takes the stress out of your application and makes things so much simpler. Let’s take a closer look.

How does approval for a logbook loan work

When you apply for a logbook loan you will need to provide a number of documents as part of your application. This has been discussed in greater detail on this site so we won’t go into it too much here. The great thing about these loans is that approval is quick and simple. Once you have applied (usually online), handed over the necessary documents and had your car assessed for its overall condition, you will know whether you have been granted a loan in as little as two hours.

Approval is done quickly as there are no credit checks necessary. The loan provider just needs to do some calculations as to the loan amount, repayment amount and a few other details based on the value of your vehicle as well as your monthly income.


 

 

How much can be borrowed?

This often differs from loan provider to loan provider but in general, the amount that can be borrowed is from 500 pounds to 50 000 pounds. Remember this is totally at the discretion of the loan provider and is based on the value of your car as well as your income and the amount of money you are able to pay back each month. The lender has your best interests at heart and it is important that you do not overcommit yourself, otherwise, if you miss payments, you may lose your vehicle.

Must the applicant be employed?

Yes! You must have a monthly income otherwise how will you be able to pay back the loan. It doesn’t matter that it is not a permanent job (for instance, you may be a waiter) but the fact that you earn money is crucial.

Repayment periods

This is something that you will discuss with the lender. Bear in mind the longer the terms, the less you will pay each month but the more interest you will have to pay. Choose a term that works for you. Also be sure to check if there are any prepayment penalties. Some lenders do charge if you pay your loan back before the agreed term amount.

 
 

Repossession

Make sure you know exactly how repossession works should you default on your loan. Some providers will take the car after just one missed payment. We believe that the borrower should be given every chance of making up for any missed payment before a car is repossessed to cover our costs.

So there you have it, a few important points to be aware of when taking out your first logbook loan.