As logbook loans become more popular, more people are looking for information and details about them on the internet. In layman’s terms, a logbook loan is credit which is secured against your vehicle. The vehicle logbook is part of the documentation that comes with every car, van and motorcycle. It acts as a registration document for the vehicle and details the owner, the VIN and chassis numbers and other important details.
The main difference between a logbook loan and any other type of loan is the fact that the loan is secured against a vehicle rather than an individual. Say, for example, that you visited your bank and asked them for a loan, they would then use a computer program to look into your credit history and worthiness. This would help them to assess whether lending you money is going to be risky or not.
With a logbook loan, the lender looks at the value of your car rather than your credit worthiness and therefore it is easier to secure a loan on your car, than obtaining a normal unsecured loan through your bank. Plus this kind of loan makes them ideal for people with poor credit history, court rulings and defaults, because none of that is taken into account when applying for a logbook loan.
Another advantage to using logbook loans over other methods of acquiring credit is that they are a lot simpler and quicker, meaning you can get your hands on your money a lot sooner. With bank loans, you will normally find that you have to fill in a lengthy and detailed application form, as well as the waiting for the credit check and other formalities to be finalised.
Logbook loans on the other hand normally take as little as 24 hours to be completed, all it takes is the application to be filled in online and then waiting for the lender to contact you, then meeting with them in order to complete the formalities.
Most people use logbook loans as a short term solution to some financial difficulty that they may be facing, and this means that the interest rates can be higher as a result. Plus the company lending the money will have had the problem of people not paying and it can be a risk for them to grant the loan in the first place.
The company providing the logbook loan will only give you a certain amount of money and this will depend on the model and age of your car as well as the condition it is in. Plus, the company will need to see some kind of proof that you are earning enough money in order to pay back the loan. Not keeping up with your monthly installments means that you are at risk of losing your car, and it will be subject to a repossession order if you do not keep up the payments.
Hopefully, this article has given you some idea as to what a logbook loan is, and how it can help you to secure some much needed revenue in the short-term.
Hugh Tyzack is the managing director/founder of Loansforbad-credit.co.uk . He is an expert when it comes to loans and personal finances, if you need help getting a logbook loan click here to find more details. Hugh also enjoys playing the piano and listening to music. Why not hook up with Hugh on Twitter @badcreditloans8 and also on Google+