What are the merits of applying for logbook loans?

If you reside in the UK and you have bad credit, you probably have heard about logbook loans. Like any other citizen, you know how difficult it is to get a loan advancement from high street bank when you have a poor credit rating. Chances are that you’ve had your own share of rejections and have been looking for a way in which you can get approved for a loan without your credit score scrutinized. If that’s your wish, the logbook loans are your best bet.

From the sound of the name, this is a type of loan that essentially uses your car as security. You put up your car as security to get the cash you require from your logbook loan provider. However, you do not lose possession of your car. The good thing is that you continue to make use of your car as you make repayments for your loan. Prior to your logbook loan being approved, you need to sign a bill of sale agreement which essentially passes the ownership of your car to your logbook loan provider. You also need to give your lender your car logbook loan prior to them approving your loan. With a bill of sale document, your lender does not need to involve a court before repossessing your car.

Logbook loan merits

No credit checks

Well, to begin with, credit checks are mandatory according to UK law prior to approving a loan or a mobile phone contract. The only difference is that the results of the checks as regards logbook loans have no impact as to whether one is approved or not. As such, if you have a poor credit rating or a history of defaults, you have nothing to worry about as regards approval.

Simplicity of requirements

Unlike other loans that require a lot of requirements and paper work before you can be approved, the situation is different with logbook loans. You simply need to have attained 18 years, provide proof of address, proof that you receive income regularly, have a V5 document, and be a bonafide citizen of the UK. With that, you are good to go and can apply for a logbook loan without qualms.

Ability to apply for a large amount of money

If you have dealt with payday loans, you definitely know that the amounts advanced are not only small but also the period of repayments is somewhere between 2 weeks and 3 months. What if you want a large amount of loan and yet you have bad credit? When this happens, logbook loans are your best bet as you can apply up to 70% of your current car value.

Longer repayment period

Logbook loans repayment period take up to 78 weeks and this means that you can spread your repayment for a longer period of time. You can choose to make repayments based on a schedule you are comfortable with. Just to ensure that you do not default as this may lead to your car being repossessed.