Get to know the requirements and characteristics of logbook loans in the UK
Logbook loans in the UK are provided in respect of your vehicle which means the lender owns your vehicle until you payoff the loan. Once you repay the loan, you can use your vehicle.
What is the purpose of logbook loans?
A person who is running out of cash can choose to take logbook loan using his vehicle as security for receiving the money. These types of loans are basically made on clear logbooks and this is the reason that they are termed as logbook loans. However, there are certain criterions to fulfil for securing a loan. These loans are very useful for those who need quick cash.
Criterions to fulfil for securing logbook loans in the UK
A logbook loan is only provided to the vehicle owner if the logbook of the vehicle is clear. A clear logbook ensures there are no financial compulsions associated with the vehicle. Taxes and insurance allotted on the car should be paid before borrowing this loan. Moreover, the vehicle should be registered in the name of the vehicle owner or the person borrowing the loan. It should not be registered on other person’s name. You cannot sell your vehicle without paying off the loan.
The vehicle you offer for securing logbook loans should be in good shape and not more than 8 to 9 years old. To make sure that the car is in good condition, the vehicle needs to present an MOT certificate to the lender. In every three years, a MOT inspection takes places to ensure that the vehicle is in good condition and up to the standard to drive on the roads of the UK.
How do logbook loans in the UK work?
Logbook loans are now available on the internet. You can choose to take the loan as per your requirement. A person can borrow £700 to £40,000 depending on the condition and value of your vehicle. Though, you can only borrow half of your car’s worth.
When you apply for a logbook loan, you will be asked to hand over a clear logbook of your vehicle or the registration document. The documents make it confirm that you are the registered owner of the vehicle.
How to take out logbook loans in the UK?
If you are living in the UK, you need to sign a credit agreement or a form termed as a bill of sale. The agreement ensures that the lender owns your vehicle temporarily and you will be able to use it again once you pay off your loan amount.
The law or the higher authority recognises only this bill of sale if the lender and the borrower register with the court. If the bill of sale or form is not registered, the lender must propose a court’s approval in response to your vehicle. However, it is a duty to check whether the bill of sale is registered or not.
How much logbook loans in the UK costs?
The interest charges for logbook loans vary from 300% to 400% APR or higher. The interest is charged on each week. Therefore, if you have borrowed £2000 and paid £60 every week for around 78 weeks, you would repay around £4750 in total.