The Benefits of a Logbook Loan

The UK deep in recession is one of the primary causes of financial struggles this past year. Making ends meet every month remains the top concern for households as everyone waits until the economy digs itself out of crisis. With such a state, the number of people turning to logbook loans has steadily increased.

A log book loan is one of several quick loans that are available to the public. It involves putting your vehicle up for collateral, until your loan has been repaid. But what makes the logbook loan a popular choice, over other quick loans?

There are many benefits to a log book loan:

You can borrow a size-able loan amount.

Unsecured loans would put the borrower at the mercy of the loan provider, who would decide how much he’s willing to lend. Because logbook loan providers secure themselves against your vehicle, they would base the loanable amount on its market value.

Lenders would provide money of around 50-60% of your vehicle’s market value. A car in decent condition that’s less than 10 years old would fetch a good loan amount for emergencies. Of course, log book loan companies would have criteria that your car should meet.

Loans can be taken out easier and quicker.

Financial institutions such as banks have strict requirements for its loan applicants. The economic downturn has only made the screening process even more meticulous and not ideal in an emergency situation when you need cash fast. Additionally, a bad credit history would reduce your chances to nearly zero of getting approved for a loan.

Logbook loans require relatively little from its applicants. Credit history will hardly play a factor into the approval process, given that you’ve already put up your vehicle as collateral. However, a stable income would be criteria for most lenders, to show that you can pay what’s owed with interest.

As long as you are the owner of the car and are at least 18 years of age, there should be no reason for a long drawn out process. The conversion of loan applications is very fast, with companies approving an application in an hour to a day.

Log book loan interest rates are relatively lower.

Payday loans, the distant cousin of logbook loans, are well known to charge 4-digit percentage rates of interest. Coupled with a tight repayment schedule, if you can’t settle the loan within your next payday, you’re in for a bigger problem than what you started with.

Log book loans have a longer schedule of payment with much lower annual percentage rates. While it’s still meant to be a short-term financial solution, borrowers are given more leeway in case a payment can’t be made on the deadline. Compare loan companies to make sure you have the best deal, especially when fees for early settlement or late payment come into the picture.