Who are Logbook Loans For?

A logbook loan is designed for people who need extra money but cannot get a standard loan. Many people borrow money using credit cards, bank loans and overdrafts, but there are people who cannot borrow this way. Some people have CCJ’s against them, have been declared bankrupt or have a bad credit record for other reasons such as not paying back debts, having too much credit or having no credit record due to no borrowing history.

If you cannot get a loan in a conventional way, then you need to look somewhere that will lend money without doing a credit check. Logbook Loan companies do not do this. They do need you to fit other criteria though. You will need to own a vehicle that is worth more than the loan. You will need to have an income to pay back the loan. You will need to be able to prove your identity and be prepared to hand over your logbook to the lender.

So if you need some money urgently and cannot borrow it elsewhere, then you could get a logbook loan. It is important that you won the vehicle. If you have a loan on it, then you may not get a loan. If the loan is worth less than the resale value of the vehicle, then you might be able to borrow some of its value.

Logbook loans are expensive and so if you can borrow money elsewhere, it is best to do so. You will find that they may be able to get you the money quicker than other sources though and so you may need them for this. However, do try seeing if your bank can extend your overdraft or your credit card limit first as this could be a better way to get the money. If you do not have a credit card or overdraft, then you may not be able to negotiate one at all or in time and therefore a logbook loan could be the way to go. You will of course need a vehicle to use as collateral that fits their requirements.


Logbook Loans and Bad Credit Records

If you have a bad credit record, then it can be extremely difficult to borrow money. This is because lending money is a big risk and if you have shown in the past that you are not good at being able to make repayments or have never borrowed before, then a lender will worry that you will not be able to make their repayments.

However, some lenders, such as those that offer logbook loans, are prepared to lend to people without giving them a credit check. They will use other information to decide whether they want to lend to you or not. They will want you to have money coming in each month, to show that you have the means to pay back the loan. They will also want a vehicle to use as collateral. They will need you to prove that it is worth some money so they will need to see the MOT certificate and they will look up the value.

If you already owe some money on the vehicle, perhaps because you had a loan to buy it, then this will be taken in to consideration. It might be felt that you owe too much money on it or that it is worth a lot more than is left outstanding. If they feel it is worth more than you owe on it, then they will probably lend you about half of the difference between its value and what is outstanding on your vehicle loan. If you own the whole vehicle then they may lend you more.

It is important to make sure that you will be able to manage the repayments though. It can be tempting to borrow more money than you need, so that you can have a bit extra to treat yourself. However, the cost of borrowing that money is big and if you cannot afford the repayments the fees and interest are even higher. So make sure that you are taking on a loan amount that you can manage. You need to be able to pay it back and if you lose your job, then you will still have to find the repayment amount each month, so bear that in mind.


Logbook Loans, Crazy Idea? Or Useful Financial Solution?

When it comes to types of loans, there are loans to fit all shapes and sizes, all peoples’ circumstances between the rich and people not so fortunate. One of the more prominent types of financial arrangement that are mentioned most often in the current climate are the ‘bad credit loans’.

What is a bad credit loan?

A bad credit loan is a loan that is designed to cater for someone who has a bad credit history, someone who has missed payments, or has previously been through hard times financially.

Now, a bad credit arrangement isn’t limited to one type of finance, there are several different types coming in all different shapes and sizes.

There are pay day loans, which are short term cash arrangements that are intended to provide an important sources of quick cash until pay day.

There are also guarantor loans, that are designed for people that have a guarantor who trusts them enough to honour their repayments in the event of a default or non-payment.

There are also logbook loans available to individuals who have bad credit ratings, but are comfortable with putting their car forward as collateral in order to secure the loan.

New car

What Are The Advantages & Disadvantages of Logbook Cash Loans?

This is an important question with an even more important answer.

The advantages of logbook loans are few and far between, it is an expensive financial product, and is only to be considered in the event that you are in an emergency and you are absolutely certain that you need a loan of this nature.

This is because of some key facts:

1 – The interest rates are very high on logbook finance, and the repayments large.
2 – In the event you default on the loan itself, you will lose your vehicle if you are not careful
3 – You can only borrow up to 75% of the LTV of your car on one of these loans, meaning that you should be careful that the lender or broker will off you the money you need in the first place.

So, to address the initial question of this article “Is getting a logbook cash loan a good idea?” in many cases the answer is “No” however, if you absolutely need a loan, and this seems like the only available option to you, then, used responsibly a loan of this type could be OK.

It is advisable that you look for alternatives, because there are cheaper types of finance arrangement out there available to most people, you should check if you qualify before applying for logbook finance.

The qualification criteria tends to be broad for this kind of arrangement with most people with a car free of finance being perfectly acceptable as collateral.
Explore other options before taking out logbook borrowing though.