Because of how easy and quick the loan process is, logbook
loans have become an ideal solution for people with immediate financial needs
in UK. But just like with any type of loans, there are risks involved. It is an
excellent alternative if you need fast solution but at the same time, it makes
sense to know more about logbook loans.
Before using your car to secure a logbook loan, here are
some things you need to know:
Fast Cash
and Loan Amount
When it comes to borrowing money, logbook loans are one of
the fastest means to get cash. There are no credit checks involved hence same
approval is usually the case. The borrower can borrow from £500 to as much as
£50,000 depending on the value of your car. Normally, lenders can loan you up
to 50% of your car's worth.
Applying
for a Loan
To apply for a best and cheap logbook loan, all you need is your own
vehicle to serve as collateral. The lender will keep the logbook or the
vehicle's registration document. You may also need to sign a credit agreement,
a "bill of sale" in particular, as part of the application process.
Getting
the Loan
Upon approval of the loan, you can get it in the form of a
check or quick cash service. Checks usually take days to clear hence majority of
lenders offer quick cash services allowing you to get the money within 24 hours
or less.
Choosing
Repayment Terms
Depending on the amount and your preference, you can choose
the most suitable repayment terms. In general, a logbook loan runs for 18 months
and sometimes less if that's what you prefer. Many lenders also offer terms of
2 to 3 years to allow flexibility.
Paying
the Loan
Payments are often made on a weekly or monthly basis. You
can repay the interest charges until the last week or month of the term. The
last month is when you are expected to pay the loaned amount. In case you want
to pay off the loan earlier, you can do so to reduce interest rates. The key is
to speak with your lender and make the necessary arrangements for repayments
that you can afford.
Costs and
APR
Lenders in UK generally offer logbook loans with about 400%
or more APR. For instance, if you're borrowing £1000 for the duration of 18
months, your weekly payments will amount to £35.90. The amount is based on a
fixed interest rate of 120% making the total amount payable to £2800. In total,
the representative APR will be 442.66%.
To compare APRs among UK's top logbook lenders, you can
visit this website here.
What happens
if you can't pay back
In case you fail to make repayments of the loan, you have
two options. You can make alternative arrangements with your lender or you risk
your vehicle being sold. Lenders will not usually repossess your vehicle unless
you've fallen behind for several months. Since they have the logbook or the V5
document, the lender has the right to sell your car without the need to bring
it to court.
The
Bottomline
A logbook loan is an ideal example of a quick fix solution
to many of your financial problems. It is fast and easy to avail with the
promise of giving you the cash within a day. All you need to do is use your car
to secure the borrowed money. As a responsible borrower, however, you need to
make sure that you can afford the repayment terms to avoid the risks of losing
your car and high interest rates.
