Getting a loan from a bank or another financial institution is not easy these days. Fortunately, new forms of lending have emerged in the recent years. One of them is called “logbook loan” and is becoming popular in the United Kingdom. If you're interested in it, you can visit LogbookLoanReviews.com for even more information. The purpose and idea behind this type of loan is to allow a person who is in need of cash to get a loan that will be connected with his or her car. The loan only works if you live in the UK, but that doesn't mean that, in the next few years, it won't spread to the mainland Europe perhaps.
The beauty of logbook loan is that you can apply for them online and get the money on the same day, provided, of course, that you are approved for them by the lender (fortunately, it is much easier to get approved for this type of loan than a regular bank loan).
Of course, when it comes to loaning money from someone, you probably want as much information as you can get. Here is a comprehensive guide to them that will, hopefully, make you better understand this type of loan and the best way to get your hands on one.
What is a Logbook Loan?
So what exactly is a logbook loan? To put it simply, this is a type of short-term loan that you can use whenever you need some quick cash (and who hasn't had a need for this at least once?). Unlike regular loans, where you need to explain to the bank agent exactly why you need the loan (the purpose of it), a logbook loan company will issue you one of these for whatever your heart desires, from buying a new stereo system to paying urgent bills.
How Does it Work?
Of course, you don't get the money for nothing here. In exchange for the cash, you need to hand over the V5 logbook of your vehicle to the lender. This means that the loan will be secured against your car. Once you agree to this type of loan and sign the necessary papers, you have effectively signed a bill of sale that says that, in the case of your inability to repay the loan in full, the lender gets to keep your vehicle.
Who can Qualify for it?
A great thing about a logbook loan is that there are very few requirements if you want to qualify for one. Naturally, you have to be at least 18 years of age. Next, you must prove that you are employed and that you have a steady and regular income (proves that you will be able to pay the loan). You need to present a certain proof of income, of course, such as paystubs. Finally, you have to be the registered owner of the vehicle, which has to be free of financing (no loans on it), insured, with a MOT certificate and taxed.
You Have a Bad Credit History? Not a Problem
One thing that may keep you from applying for a loan these days is the fact that you might have a bad credit history. If you do, your bank will refuse to give you a loan when they check your credit rating. This isn't the case with logbook loans. There is no credit check here, so even if you have a very bad credit rating, or none at all, you'll still be able to get this type of loan. The reason for this is that the logbook loan is based on the value of your car and your income.
How to Compare Logbook Lenders?
If, after reading all this, you are interested in applying for a logbook loan, you should search for lenders providing the best repayment terms and the lowest interest rates. The representative APR rate can vary from around 350% to almost 500%. If you can, compare the interest rates and take a look at the fees required for document registration. They are usually between £25 and £50. Also, make sure that the lender is a full-fledged member of the CCTA (Consumer Credit Trade Association).