If you are in a quandary on how to get approved for a loan even if you have bad credit, it might be time for you to consider taking out a logbook loan. Unlike personal loans that require you have a good credit score or collateral prior to approval, logbook loans are instrumental in the sense that they do not take into consideration a person’s credit score. In essence, a logbook loan is a specific type of secured loan where a person’s vehicle is used as collateral. However, unlike conventional loans, this particular type of loan does not require one to have a stellar credit score. In fact, the requirements for availing this type of loan is quite simple as this site will further expound. You simply need to be a UK citizen of legal age and able to prove ownership of the car you wish to use as collateral.
Getting the loan
The greatest appeal with logbook loans is the fact that it provides reprieve to individuals who are unable to avail loans through conventional means. It’s the perfect loan instrument for UK individuals who are deemed as high risk owing to the status of their credit score. Applying for the loan is pretty simple as all you need to do is locate a UK logbook lender of your choice depending on the competitive interest rates they offer. Provided that you have all the requirements, processing of the loan is usually done within hours and a check of your requested amount given to you. However, if you need cash instantly, there are a number of UK lenders who offer instant cash at a fee. The choice is yours to make and credit checks are never an issue.
What kind of car is accepted as collateral?
Most UK lenders have no problem accepting any type of car as collateral provided that it is in good condition (not have been on the road for more than 10 years), does not have any kind of financial attachment to it and the car in question is legally owned by the applicant.
Paying off the loan
When you apply for a logbook loan, you have up to 78 weeks to make repayments. The onus is on you to make a decision as to whether you wish to make weekly repayments, bi-weekly repayments or monthly repayments as well as the preferred mode of repayment. You can actually pay through a debt collection agency, through automatic deduction from your bank account or even through cash.
Any risks involved with applying for a logbook loan?
The biggest risk is of course the high interest rates associated with logbook loans. The interest rates are sometimes too high that you might end up repaying twice the principal amount. The other main risk is repossession. When you take out a logbook loan, you sign a bill of sale agreement that essentially makes the lender temporal owner of the car and gives the lender legal right to repossess and even sell your car should you be unable to repay back your loan