How Do Logbook Loans Work?

No matter the reason for your logbook loan application, there’s one vital thing you need to understand before you go ahead and go through with the application. Like with any other types of borrowing, it’s crucial to understand how logbook loans work. Otherwise you might end up in a far worse situation financially than you were before. This quick guide will tell you how logbook loans work.

Logbook Loan Basics

As a secured type of personal loan, logbook loans are specific only for people who own a vehicle. If you’re not a vehicle owner then you aren’t eligible to avail this loan. If you live in the UK, of legal age and you own a vehicle free of financing then this type of loan is for you.

Those who are eligible to apply for a logbook can borrow between £500 and £25,000 even if the borrower has a poor credit score. Some lenders may lend you as much as £50,000. In any case, you just need to keep in mind that the loan is secured against your car hence higher risks involved than if you avail an unsecured loan instead.

Approval Process

With no credit checks needed, logbook loans are easy to get approved for. Providers just need to make sure that you can afford the loan and your application is good as approved. You can apply online from the comforts of home, wait for assessment and get approval in 24 hours or less. For borrowers who need quick cash, it doesn’t get any better than this.

As soon as your loan is approved, your provider will wire the money to your account, which you can then use to take care of any pressing financial problem.

Risks of Repossession

Though logbook loans seem like an attractive alternative for borrowers with bad credit issues, there is a high risk involved if you go this route. With the loan secured against your vehicle, your lender has the right to repossess your vehicle as indicated on the loan terms in the event that you failed to fulfill your end of the deal. If you remember signing a bill of sale document that also means that you agree to your lender reselling your car in case you still fail to update your payments. To avoid losing your car to your lender, planning your loan as thoroughly as you can is highly recommended.

For a more comprehensive guide about logbook loans, Money Advice Service is a great site to visit.