The world of financial product never fails to amaze the ever cash-hungry clients. If you have a car that is worth a good amount of money, you can use it as collateral to get some cash while it still stays in your possession and use. The product is called logbook loan.
Understanding the Product
Logbook loans are loans that are advanced to consumers by taking temporary ownership of their vehicle. The consumer keeps using the vehicle as long as he is not defaulting on payments. The vehicle’s logbook or registration documents are given in the custody of lender. The interest can be paid with different frequency, starting from weekly to monthly payments. Once the interest, as well as the principal, is repaid, the ownership is transferred back to the consumer.
Here are some additional features of the product:
- The amount borrowed depends on the value of a vehicle. It can range from £500 and £50,000. Typically the lender will ask you to get an independent valuation of the vehicle.
- Money is usually transferred electronically into the consumer’s account.
- Since a logbook loan essentially involves two transactions, there are two agreements: credit contract and bill of sale.
- The credit period is fairlylong: as much as 78 weeks. But the consumer can pay it off earlier if he wants to.
- There is an option to pay interest only on the outstanding amount. The actual principal is repaid at the maturity time of the agreement.
- Logbook loans are generally considered very expensive. In fact, they are notorious for having exorbitantly high-interest rates. When penalties and other fee are incorporated, typical annual percentage rate on these loans can be as high as 400-500 percent.
- They are available only in England, Wales and Northern Ireland.
Advantages of Logbook Loan
Logbook loans are a quick fix for people in dire need of instant cash. Here are some advantages of this simple product:
- The primary advantage of a logbook loan is the quick Since the only main requirement of this loan is ownership of the vehicle, there are no detailed background and credibility checks done. This adds to the promptness with which a consumer can actually get the cash in his account. It sometimes takes only a day to get the loan.
- Logbook loans were originally designed for people who cannot apply to regular commercial banks. Thus, there are no tough prerequisites to qualify for a logbook loan. The consumer has to be a resident of England, at least 18 years of age and legal owner of the vehicle against which the loanis applied.
- The credit history of the consumer is not taken into account while advancing the loan. This is one of the reasons the loans are quickly processed.
Logbook loans provide instant access to cash. They are usually used as the last cash resort by people with poor credit rating. Certain aspects must be kept in mind while applying for a logbook loan.
The lenders have the right to employ bailiffs to get hold of the vehicle if the client defaults on payments. Typically a notice is served first giving the consumer 14 days to make the payments. Since the ownership of the vehicleis transferred in a logbook loan, if a consumer fails to make the repayments he can lose the vehicle. The lender sells the vehicle to get the cash back. If the amount owed to them is more than the sale value, the consumer still has to pay the shortfall. The legal system is such that the logbook lender does not need court orders to seize the vehicle and sale it in the event of default by the borrower. It is thus advised to carefully evaluate other financing options before opting for a logbook loan.
In addition, a consumer must be aware that cars that already have financing agreements under process are not eligible for application for a logbook loan. However, in certain situations, if the former car mortgage agreement is about to end, some lenders may consider processing the loan application.
Also, as stated earlier that logbook loans were originally designed for people who could not access credit in the formal banking system.This makes the product as a high-risk product per se. So even if a consumer has a good credit rating, he will still be charged the typically high-interest rate. It is therefore suggested that the need for cash be carefully analyzed before applying for a logbook loan.
Choosing a Lender
Once you have decided to borrow using a logbook loan, it is critical that you look for a lender that offers a product with features matching your needs. Car cash point is the leading provider of logbook loans in the UK and Northern Ireland. It is fully authorized, registered by Financial Authority and regulated for conducting consumer credit business.
Car Cash Point takes pride in offering the best interest rates. Our loan products are known to be a complete package of affordability, feasibility, and compliance with company policies, terms, and conditions. Applying for a logbook loan at Car cash point is fairlyeasy. You can call us on our helpline or apply online. We’ll arrange a meeting to complete the loan process. Once the process is completed, the money is transferred directly into the bank account. We do not charge any setup, administration, early payment or exit fee. No hidden charges policy makes us more consumer-friendly than other market players.
Another peculiar feature of Car Cash Point logbook loan is the flexibility of repayment. Since we do not charge for early payments unlike other companies, our consumers have the convenience of repayment as per their financial needs. They can pay more and settle the loan early. We follow the policy of ‘Pay as you go.’This implies that interest is paid only for the time duration for which loanis held,and no extra penalties are charged for early settlements.
Car Cash Point also offers to switch loans from other logbook lender or a payday lender. If a consumer wishes to avail this offer, Car Cash Point can reduce the total payments by up to 25 percent. We’ll further send a cash-bonus as a thank you note to the consumer to make their day. So please log on to our portal and access the world of easy finance with the best loan providers in the UK!