Logbook loans are loans that a person can get against his car. This loan is secured against your vehicle, so the lender owns your car till you repay the loan. Lender owning the car does not mean that you cannot use your car. You can use the car normally like you do every day.
These loans are also called as V5 Loans.
Working of Logbook Loans
In order to get a logbook loan, you have to provide your vehicle documents or V5 logbook to your lender. The documents are a proof that you are the registered owner of the vehicle you are getting a loan against. Even if you aren’t the owner of the car, the lender gets the ownership of the car you are getting a loan against.
You can borrow a logbook loan around £50,000. The minimum amount you can borrow starts from £500. Although, the amount that you can get mostly depends on how much your car’s worth. Depending upon its value, your loan amount is decided. There are some lenders who provide just half of your car’s value as a loan. So choose your lender wisely.
Eligibility for Logbook Loans
In order to be eligible for logbook loans, you should be;
- A UK resident
- 18 years and above
- A Car owner with its documents
How Much Does Logbook Loans Cost?
Logbook loans are not like any other forms of loans. These loans are quite expensive. The interest rate which you can be charged starts from 400%. The interest rate can increase depending on the lender you have chosen.
If you don’t make the repayments of the loan, the lender can seize your vehicle. This could be done by the lenders if you have missed several of your instalments. They, however, send you a notice 14 days prior to that.
So you should avoid logbook loans if you can as they are very expensive, if you need a small fund, apply for Very Bad Credit Loans No Guarantor no fees instead.
Things You Should Keep in Mind About Logbook Loans
- You are putting your car at risk if you have missed the repayments of your logbook loan
- You should be a car owner in order to get a logbook loan, the value of the car should be above £500 at least.
- The APR of logbook loans is expensive than any other form of unsecured loans. So you should apply for a logbook loan only if you are confident enough to pay it back in time.
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