What Are Logbook Loans?
Logbook loans are loans that let you borrow money against your car. You can borrow money by keeping your car as a security for bad credit as well.
Working of Logbook Loans
In Car logbook loans you can borrow an amount near to what your car’s worth is. So it basically depends on how much your car’s value is. When you take a loan against your car you have to provide your car’s registration documents or V5 logbook until you repay your loan in full.
Logbook loans usually are long-term loans. They can be repaid for a time period of 1 to 5 years according to your convenience. The amount that has to be repaid is calculated considering the interest rates and can be paid in the form of monthly repayments.
How Much Can I Borrow With Logbook Loans?
When it comes to borrowing, you can borrow between £500 and £100,000. The exact loan amount is dependent on your car’s value and other circumstances.
You can borrow about 70% of your car’s value, but there are lenders who provide above that mark. Apart from this, your logbook loans can also be affected by your credit history, income and if you have any existing debt.
Can I Get a Logbook Loan?
In order to be eligible for a logbook loan, you should be;
- The owner of the car that you are using
- 18 years or above in age
- And the V5 logbook must have your name registered
Most of the people who have a bad credit score can also apply for logbook loans.
How Much of an APR Is Charged?
The APR that lenders charge for a logbook loan is usually high. Most lenders offer rates from 100% to 400%. That’s why it is important to look around for different quotes from lenders to get you the best deal which you can afford.
Paying Back Your Logbook Loans
You have the choice to repay back your loan on a monthly or weekly basis. You need to make a fixed amount payment throughout your loan term plus interest. The interest rate is fixed and does not change during the course of your loan.
Remember that if you have a bad credit score you may be charged a high APR than the person who has a good credit score compared to you. So your credit history plays an important role when it comes to interest rates.
Risks of Logbook Loans
If you due to any reason miss few of your repayments the lender can take away your car. They have the right to sell your car so that they get what you owe to them.
However, if your car sells for a less amount than what you owe, you are liable to pay the rest of the loan amount that’s pending. And, If your car sells for more than you owe, you get the remaining amount after deducting your owed money.
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