Log Book Loans
Log book loans are short term cash loans which are secured on your vehicle. In the United Kingdom, this is form V5 frequently referred as the logbook. Since this loan is secured on the car/vehicle documents, so you will not face any credit checks so a log book loan can be obtained regardless of credit record.
A log book loan is secured just by the documents of your car. You need not handover that for taking the loan out. Therefore, you can use the car fully even after getting loan. Here you are just releasing your equity from the vehicle in the same approach as it would in case of a house.
Your borrowable amount of the loan depends upon some factors relating with the vehicle. Your borrowing power will be defined by the make and the model of your vehicle. So, the simple equation is the better car will empower you to take out a better loan amount. Most log book loan lenders lend between £200 and £50,000.
In order to get qualified for a log book loan, you will need to meet some criteria. The first condition is that, you must be the legal owner of the car and that has to be registered in your name. Secondly, the vehicle must be clear in the question of finance. Even though some lenders lend on the vehicles these are almost clear. Thirdly, the car must not be older more than ten years. Most of the lenders don’t agree to lend on an older car. However, some lenders may demand some more documents regarding the valid MOT and tax of the vehicle.
Why log book loans are taken out?
Well, there may have many reasons behind taking out a loan. Many people use such loans in order to meet the payments of holiday or some other special occasions. The money can be used to utilize a lucky business opportunity or ordinary home improvements purposes. In fact there is no restriction on how it will be used. Before borrowing such funds, the borrower should be aware of the alternative option to get the better opportunity.
The Advantages of log book loans
It is seen that, people who go for these types of loans tend to possess a poor credit history which is constraint to take loan from regular banks. In case of the normal unsecured loans, if they fail to repay the installments, they will face increasing amount of liability in compounded account. But log book loans have a great benefit in this point. The downside is restricted up to the worth of the car.
The Disadvantages of log book loans
Though the log book loans have some exclusive advantages, yet it has some disadvantages too. It is actually a secured loan where your car is used as the security. Similar to the other types of secured loans, if you fail to settle the obligation, you may lose your car. And the interest rate is comparative higher than the other means of secured loans.
However, log book loans provide an opportunity to meet quick money requirements. You should take decision according to your actual requirement.