An overview of how Logbook loans work

Are logbook loans for everyone?

From time immemorial, getting approved for any kind of loan was always pegged on the credit status of an individual. In fact, the first thing that lenders checked was whether you had a good credit rating before they can scrutinize your application. Needless to say, the situation was rather bleak and those with a poor credit rating found the going tough not to mention the feeling of embarrassment when loan applications were turned down. It is for this reason why logbook loans gained traction when they were first introduced in the market. Finally, UK citizens with a poor credit rating could apply for a loan without their credit score status rearing its ugly head.

There were no longer cases of “we are sorry but we cannot approve your loan at this time” as logbook loan approval were not based on the status of a person’s credit score. All that a person needed to have was a car that was legally registered in their own name as collateral and they were good to go. The application process was simple, the requirements basic, the dispensing of the needed cash fast and there was a general sense of relief among individuals who had perennially been on the receiving end of one rejection after the other. Indeed, logbook loans were a saviour to a class of individuals who had in the past gone through much trouble just to get access to credit facilities.

How logbook loans work

It is imperative to note that logbook loans are for everyone irrespective of their credit history. They are simply more popular with individuals who have a poor credit rating because of the difficulty in getting approved for ordinary loans. Essentially, before you apply for a logbook loan, it is instrumental that you have a car that can be used as collateral. The car, van or motorcycle should be registered in your own name and not belong to someone else. Secondly, you should be an adult of legal age, reside in the larger United Kingdom, be in some form of employment and provide proof of identification. Other documents your logbook loan lender might ask for include Ministry of Transport (MOT) certificate that basically shows proof that your car is in good condition, insurance as well as tax details for your car and bank statements to show proof of regular income reception.

When this is fulfilled, a logbook loan lender will evaluate the value of your car to establish whether the car can cover the amount of money you are requesting for. If the car is in good condition and its value above the amount you are requesting, your loan will be approved and you should be able to get cash within 24 to 48 hours. You have the discretion to use the logbook loan cash as you deem fit provided that you do not default on monthly payments. Repayments are up to 78 weeks and therefore you have the flexibility to plan out your repayments as you deem comfortable.

In conclusion, logbook loans have indeed given individuals with a poor credit rating a new lease of life. However, defaults in payment could lead to car repossession and in various instances law suits especially when the proceeds of the car are not sufficient to cover the principal amount together with the interest accrued.