It is possible to borrow between £500 and £50,000 with no credit checks through a secured loan on the family car. This is the case even if bad credit or financial difficulties are an issue. The problem with a logbook loan is the high APR.
What Is Required to Get a Logbook Loan?
- Aged over 18;
- Legal ownership of the car;
- The vehicle must be taxed, insured and have passed an MOT;
- It usually needs to be clear of any car finance;
- The borrower must be able to prove affordability;
- The lender keeps the logbook;
How Is a Logbook Loan Repaid?
The standard term for logbook loans is 58 weeks, although it is possible to pay them off more quickly. Due to the high APR, it is advisable to keep the term as short as possible. If there are problems making the repayments, contact the collections department as soon as possible.
Advantages of Logbook Loans
- Speed of availability. A logbook loan can usually be approved and payment received on the same day;
- No credit check. It is possible for those with: bad credit, County Court Judgements or CCJ’s, defaults and bankruptcy to get a logbook loan;
- Higher borrowing limit. Using a car for security means that it is possible to borrow considerably more than would be possible with a Payday loan.
- A Logbook loan can be used for any purpose. No restrictions exist in terms of what the money borrowed can be used for.
- Helps prevent late rent and mortgage payments. Late payment can result in bad credit so paying on time is important. In certain situations, it can prevent eviction or repossession from happening.
Disadvantages of Logbook Loans
- High APR. Interest rates are extremely high. A logbook loan represents the most expensive form of borrowing on the market, but it is sustainable provided the money is repaid within the agreed timeframe.
- Paying bills next month. If struggling to make the repayments this month, it will become even more difficult to make any repayments the month after. The interest paid will leave less disposable income, although this could be overcome by working additional overtime.
- Uncertainty. If a fresh emergency happens it can be difficult to find the money to repay it. This can result in adverse credit or bad credit, making it difficult to secure further credit in the future. Adverse credit stays on a credit report for a period of 6 years.
- Provides only a short term financial solution. The high APR means that it is only realistically a short term source of borrowing.
A logbook loan can provide a useful source of finance, but the high APR is a potential problem should repayments become an issue. Money issues can be tackled through a range of debt solutions. Always speak to a qualified debt counsellor should financial difficulties present a problem.