If you’re like most people, chances are high that you’ve needed quick cash at one point or another. Maybe your bills have long been overdue. Maybe you needed to pay rent as soon as possible unless you want to get booted out. Or maybe you’ve had a medical emergency and your health insurance won’t cover some of the expenses. In any case, a viable option for your quick cash needs is to get a logbook loan deal fast.
If you have good credit, getting approved for a loan should be a breeze. But it’s another story altogether if you have bad credit. Most often than not, people with bad credit are refused a personal loan because you are tagged as a high risk borrower. That leaves you little to no options when it comes to fast cash and this is where logbook loans enter the picture.
Logbook loan lenders advertise their offers with the promise of quick cash and no credit check required. In short, the financial product exists exactly for people with bad credit. But there’s just a small hitch. You may lose your car in the process if you’re not extra careful.
Considering that your bad credit has pretty much ruined your chances with a high street bank or lender that leaves you with little to no choice but check out personal loans like logbook loans. Your car, after all, is just right there and ready to become collateral for your loan.
Granted that your car is less than ten years of age and is free of any financing, you can often raise cash anywhere from £500 to £50,000 against your vehicle. Most lenders allow borrowers to borrow up to 70% of their car’s official trade value. Repayment terms may start from 12 months up to 36 months.
Looking at the surface, logbook loans indeed looked like they are attractive means to getting your cash without hassles and worries of bad credit getting in the way. For most borrowers who put their vehicles on the line, the no credit check aspect of logbook loans are what attract them to the financial product.
If you’re 18 years old or above, a resident in the UK and a car owner with bad credit, you are more than welcome to take out a logbook loan. In fact, thousands of car owners raise short term financing this way. Because there are no credit checks, approval is often speedy. You can get approved within the same day you applied and receive the money shortly after. Again, looking at it on the surface, logbook loans are life savers for most people. When you’re in dire need of cash and you have bad credit, look no further than logbook loans to save the day.
In exchange for the promise of quick cash, however, are the high interest rate attached to the loan and the risk of vehicle repossession.
When you apply for a logbook loan, your lender requires that you hand over your car’s V5 or logbook document along with other requirements like the MOT certificate, insurance details and proof of income. In essence, you are like handing over temporary ownership to your lender which means that they can repossess your car in the event that you default on your repayments. Other than repossession, there’s the issue of high interest rate. Logbook loans have one of the highest interest rates in the market typically at around 400% Representative APR.
Before signing any dotted line at the end of the day, it pays to ask the question. Is the fast cash promise really worth losing your car in the end?