All You Need to Know about Logbook Loans
A logbook loan is a form of credit you take and give your logbook as security. It works in such a way that you provide the logbook of your vehicle, which could be a car, van, or motorbike or others, and you get it back only after you finish entirely repaying the loan.
To be able to obtain the loan, you must ensure you do not have outstanding finance on your vehicle which has to be valued at £500 minimum as the loans mostly range between £500-£15000. It is also upon you to ensure you do not fall into disguise loan sharks if you decide to take such credit. All firms offering logbook loans must get registered with the FCA.
Firms calculate your car’s value and how this value will deteriorate over time, and sometimes your credit record and the amount you want to borrow to provide you with a detailed quote after you apply. While these loans are at times easy to get, some merits and demerits come with them;
The application process is very straightforward; it is dependent on your vehicle and ability to repay.
Fast pay-outs- the process can get completed in a day.
Convenience- most firms do not look into your credit history with effect to your appliance.
Flexible payment- you decide on the length of repayment, from months to a few years.
Risk of repossession- failure to repay on agreed terms is likely to lead to your vehicle being sold for the firm to recover money.
Debt trap- this may not be good for people with bad credit.