Important things everyone should know about logbook loans
Fact is that life can be really difficult sometimes. Even the Government has its own share of financial problems and has to outsource funding from other countries. So, going through tight financial circumstances is nothing to be ashamed of. Have you tried borrowing from friends and none of them seemed to bail you out? Or maybe you tried taking a loan from your bank and it still didn’t seem to work out. Well, don’t worry. Logbook loans are actually a great alternative you could try.
Take a good look at your car, because that just might be your saviour. Why don’t you leverage it? Even if the bank may not accept it as collateral, there are some other financial institutions that would love to give you reasonable cash amounts for your vehicle. In fact, all you need is your V5 document and you are good to go. You can checkout sites like justlogbookloan.uk for some of the best deals. Keep on reading to find out more about logbook loans.
Definition of a logbook loan
As Wikipedia best puts it, a logbook loan is simply a secured form of lending that is universally accepted in the United Kingdom. In other words, it can be a simple bill of sale, whereby your logbook acts as a document that transfers your car or property rights to another party. Therefore, anytime you take a loan using your V5 document, you transfer the right of ownership of your car to the issuer of the loan. That’s why it is so legally easy for the lenders to take possession of your vehicle upon loan defaulting. As a matter of fact, they are not even required to have a court order to do that.
It is very critical to know the risks you are subjecting yourself to when taking a logbook loan.
- You might actually lose your car: Some of these lenders don’t joke around with their money. They will take hold of your automobile without even flinching! Loan issuers will always tell you that they will help you out during your financial battles and even repayment. Well, the only way they will do this is by giving you more money so that they can earn more interest as you get into more debt in the long run. Don’t blame them. That’s just how business works.
- You might not meet the deadline: When people take loans, they usually have “sure” ways that will help them get more money and perhaps pay off their debt. You obviously have your own plans too, right? Well, the truth is that they might not always work out. Life can be so unpredictable at times and when that happens, you stand a serious chance of losing your vehicle for good.
- No court order: That’s a good thing for the lender but it isn’t for you. That means you can’t stall, because there is no legal process to be followed. The issuer has every right to take “their” car at any moment after you fail to meet the repayment deadline. Yes, it’s their automobile now that they have the logbook in their hands.
- Low interest rates could be traps: Some lenders will give you interestingly low rates if you take huge loan amounts. Don’t fall for it. It’s a classic trap. With logbook loans, always go for the short term options with moderate interest rates and you’ll be okay. The last thing you want is to pay a car loan for the next number of years.
With all that in mind, make sure that you are not fooled by the attractive offers and jump into a logbook loan without properly understanding the repercussions.