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logbook loan

A look at Logbook Loan basics

A logbook loan as the name entails is basically a secured type of loan. A person’s car is used as collateral when taking out a logbook loan. What this specifically means is once the loan has been approved, the lender of the loan becomes the new temporary owner of your car for the duration of the loan until you foot the whole amount of the loan plus the interest. On a lighter note, the borrower continues to physically use and be in possession of the car as he repays the loan he took against the car. Applying for a loan is pretty simple as you can do it online or from a brick and mortar office lender. The maximum amount of money you can apply for is capped at 50% or 70% of the value of the car depending on the lender you have chosen to do business with.
Suitability of logbook loans
Essentially, logbook loans are suitable for individuals with a poor credit rating who cannot avail a loan from high street banks and financial lenders due to the status of their credit score. The fact that credit checks are not a prerequisite to the approval or rejection of a logbook loan is what has made it very popular among UK citizens with bad credit.
Requirements
Unlike conventional loans, logbook loans do not require stringent requirements. In fact, you simply need to be a person of sound mind, a UK citizen who legally owns a car and a person above the age of 18 years to be able to apply for a logbook loan. In addition, your car should not have any kind of financing attached to it or have been in operation for more than 10 years. If you meet these simple requirements, then you are eligible to apply for a SimpleLogbookLoan.
Paying of a logbook loan
A conventional logbook loan runs for a period of 78 weeks. A borrower can choose to either make repayments weekly or monthly depending on their comfort. One can choose to make repayments via monthly debit deductions or make use of a collection agency which unfortunately is much more expensive. There is the option to repay the loan early in full though there are a number of lenders that charge a penalty should a borrower repay their loan early in full. It is therefore important that you read the fine print prior to applying for a logbook loan with a given lender.
Major risks
As compared to other kind of loans, logbook loans generally attract a high interest rate considering the fact that they do not take into consideration the credit score status of an applicant. The APR for a logbook loan is capped at somewhere 400% but could go higher than that depending on the lender you are doing business with. It is therefore instrumental that you check the APR before applying with any given logbook loan lender. The second major risk is repossession of your car in the event that you are unable to repay your loan. Your lender might repossess your car and sell it to recover the loan amount they advanced you. What’s worse is if the proceeds of the car are not sufficient to cover the loan amount balance, then the lender can take you to court to recover the remaining amount.