If you own a car, you can apply for a logbook loan, which qualifies you for £50 to £50,000 based on the value of your car and the lender. Logbook loan or V5 loan is like mortgage loan, where you offer your vehicle as the security. The lender keeps the original V5 documents until the loan is paid. People with very poor credit benefit from this type of loans.
Who Can Take Logbook Loans
If you fully own a car not older than eight years, you can qualify for a logbook loan. There should not be any vehicle loans against the vehicle. The lenders also require you to fully insure the vehicle. Borrowers also surrender the logbook or registration documents at the lender. You can use the vehicle as normal, except you don’t have the logbook of your car or other vehicle.
Another requirement is that you must have a regular income. Lenders will check if you have an income and if you can repay the loan. They will not lend you if you can’t prove your income.
The advantages of logbook loans include instant qualification of loans. You can get a loan in a matter of hours. You may not qualify for a regular loan if you approach a bank or mortgage lender. In case of V5 loans, the lenders don’t even check your credit history. Poor credit score is not a problem with logbook lenders. This is exceptionally beneficial while facing emergencies of any kind. You have nowhere to go and you need some finances quick. If you own a car, that is all you need to get an instant loan.
How to Get Logbook Loans
Most logbook loan lenders have their own website. You can check the different lenders before zeroing in on one. Fill the application form at the website. The lenders have local offices almost everywhere. Look for the lender that has an office in your city. They will ask you to reach the office with your car or other vehicle and with the documents required. If they are satisfied that you don’t have any loans against your vehicle and that the vehicle has adequate insurance, they will give you the loan. You can get the amount as cash or deposited into your bank account. You have to surrender V5 documents until you repay the loans in full.
Disadvantages of Logbook Loans
The most important concern is having to surrender the vehicle registration documents. More important factor to consider is the high interest rates you are to pay. If you plan your finances around logbook loans, it will be a financial disaster. This is because you will be paying very high interest rates and charges. It may be the only option available to you while you are in a financial emergency. Once your financial emergency is over and you have the money, make sure you repay the loan in full. Unlike regular mortgage loans, there are no pre-closure charges associated with logbook loans. You can repay the loan in full any time your finances allow you.
Carefully study the terms and conditions before you apply for the loan. Also make sure you are dealing with a legitimate lender. If you know where to look and what to do, the logbook loan can help you pull out of your financial emergency.
If you are in a financial emergency and if your credit history has CCJ, defaults or bankruptcy, your chances of getting regular finances is low. If you own a car, you can get the loan without enduring any hard questions on the financial situation you are in.