What Are Logbook Loans
Logbook Loans are special kind of loans given by local lenders to the customers running short of cash or may require emergency loans. Secured loan means the amount borrowed by the lender against the vehicle as collateral security. However, the borrower can still use and access the vehicle. People apply for loan against car just because of their urgency of cash in awful financial circumstances.
In most of the cases, the maximum amount of loan that you can get from these lenders is about 50% of the trade value of the vehicle. Additionally, you would be given a repayment time period based upon the age and value of the vehicle, and this ranges commonly from 18 months to 36 months.
The special provision involved in logbook loans is that the lender can reclaim the borrower's vehicle without a court order. In loan against car, the borrower can additionally regain ownership of the vehicle once the loan is fully repaid. It has been observed in majority of the cases that logbook loans are used by people who have bad credit history and who are in awful financial condition.
Why Logbook Loans are Getting Popular?
Logbook loan is the best suited loan in its kind for all loan seekers with poor credit history.
The instability in income and financial problems faced by several people of the advanced countries may be the reason why people have been looking for some quick and reliable financial assistance or loans. However, seeking financial assistance from banks and other reputed financial instructions would not be easy in current scenario as the rules and regulations made by them have become stricter than before and have tightened their lending terms.
Facing financial hardships, many potential borrowers have difficulty in getting a loan from banks or other financial institutions because of the bad credit history of those borrowers. Therefore, they're looking for some other options to get loan even with their bad credit history status. These circumstances have encouraged many lending instructions to introduce the concept of logbook loans.
As earlier mentioned, logbook loans are secured loan that which requires only borrower's vehicle as collateral for the loan. Additionally, lenders will not investigate for any kind good or bad credit ratings.
The popularity of Logbook Loans in UK has skyrocketed by about 60% since 2005 up to the present. This only shows that many persons are affected by the global economic and financial crisis, and are applying for financial relief from various lending institutions. The figure above is quite staggering and gives a lot of concern that people are taking the bitter pill of availing for the high-interest Logbook Loans.
This is therefore, an indication that many UK residents are having financial problems with the traditional banks. The commonly granted loan amounts by Logbook Loan companies are ranging from a low of £500 to a high of £50,000; however, the loan amount is also limited to about 50% of the trade value of the vehicle. Moreover the age and value of the vehicle also determine the maximum length of payment period which usually ranges from 18 to 36 months.
The lending companies do not conduct the usual credit investigation process because this is secured by collateral using the vehicle’s logbook or registration certificate. The Logbook Loans are appropriate for people who have poor credit rating because this factor is not a prerequisite for granting the loan.
One of the attractive features of Logbook Loans is that the lending institutions will not inquiry where the loan amount will be used, unlike the traditional bank loans. Hence, the borrower has the free hand of spending the money where he wishes to use it. There is no problem in spending money which does not add up to borrower's financial history or any luxury expenses with the logbook loan lenders.
If you want to get rid of all your debts and financial burden, then Logbook loans is not a viable option for you as it includes a higher interest rate. As much as possible you should seek another form of financial rescue, and make this Logbook Loans as your last resort.