What are Logbook Loans?
There are a million and one ways to get a loan these days – but it’s not often as easy as it seems! Getting a bank loan can have you filling out reams of forms and jumping through any number of hoops before you get anywhere near any money – and payday lenders or short fix loans can be notorious for both their APR and, most infamously, their trading standards.
Luckily, there is an alternative available if you are in need of money but are keen to avoid running into problems with your bank or to avoid playing catch-up with quick fix lenders – a logbook loan.
A logbook loan, if you’re the owner of a road vehicle less than 10 years old and has a full MOT and all documentation, is a payment granted to you in return for certain essential documents from your car or van – in particular, your logbook V5 Document! Logbook lenders will request you provide your documentation often along with a spare key as insurance for the loan that you are to be provided – you will, of course, also be requested for the essential identity and financial history proof that will allow the lender to be assured that you’ll pay the money back at the end of the term.
Logbook loans are very attractive if you’re looking to avoid paperwork with your bank or building society or are struggling with credit, or if you’re unsure about getting into a deal with a payday lender. After all, there’s little else asked of you apart from the minimum of your car details and your assurance that you will pay back the money plus the accrued interest. On paper, it seems like a lucrative deal – and with a recent crackdown on lending that has seen companies come under tighter codes of conduct, it’s unlikely you will be out of pocket providing you make yourself aware of the full terms and conditions beforehand.
This is an essential point when it comes to looking into taking out a logbook loan – do your research. How clear are the company’s terms and conditions? Does their website highlight their regulation and complaints process? Most importantly, what is the rate of interest, and is it fixed? The last thing you need to get into is a sealed-in deal where you are unable to pay back both your agreed monthly rate and the accrued interest – meaning that a thorough check of your finances alongside researching your market is crucial before you are to go jumping in feet first.
It’s also worth bearing in mind that should you fail to make your repayments your car could be at risk – meaning that your freedom to drive could be restricted as a result and you could find yourself in even further financial trouble later down the line. By researching logbook lenders’ APRs to find the best deal for you and by doing your financial homework, you’ll soon be able to calculate if handing over your car, essentially, is a worthy investment.
Logbook loans are a fantastic source of quick and easily-approved money, but as with all money lending, there is a risk involved. If you can afford to pay back an agreed monthly rate and the interest charged each month for the period allocated, it may well be worth your while handing the documents over – and compared to any other way of obtaining a temporary grant, this process is certainly one of the simplest and most attractive to people with credit worry or a desire to avoid lengthy paperwork or future repercussions. However, you have to ask yourself: if I can’t afford the repayments, can I really afford to lose my car?