Logbook loan is a British term which means to secure your loan with the borrower’s vehicle.
In this loan, the lender retains the registration certificate of the borrowers’ vehicle or the logbook while giving loans to it. This logbook or registration certificate remains in the possession of the lender until the borrower repays the loan and this way the lender finds himself in a secure place whereas the borrower is bound to pay the loan back.
If the borrower fails to do so, then the lender has the right to repossess the vehicle which does not require any court order. Logbook loans are very much secured as not only the lender feels secure that even if the loan is not repaid he gets to use the vehicle and gets the possession whereas the borrower is also obliged to repay along with the interest.
But for that, the lender has to inquire well the registration certificate or the logbook of the vehicle given by the borrower whether it is registered in his name or not. Therefore the main advantage of logbook loans is that it is completely secured.
The main disadvantage of logbook loans is that it offers a very high rate of interest which other lending or credit institutions do not offer whereas its terms and conditions are quite strict too. Because of such unfair terms and conditions, logbook loans are losing their appeal in a couple of parts of the world especially United Kingdom.
Logbook loans are available from £500 to $50,000 which depends on what is the worth of the vehicle, whereas you get to borrow fifty percent of the vehicle’s total value. Like other easy, affordable and reliable loans, logbook loans are very helpful, useful and quick. It is quite helpful and an open yet hassle-free way for those who have bad credit history and have been rejected by banks or other credit institutions. Thus, these people get cash immediately in logbook loans.
These loans run up to 70-78 weeks or earlier if you repay, but it is quite important that you are aware of the terms and conditions to prevent yourself from losing the vehicle. The procedure to be followed to get logbook loans is not at all detailed or require a lot of hard work or documented work unlike other loans. All it requires is a 15 minute time to hand over the logbook of the vehicle, the possession of the vehicle, sign an agreement and there you go. But along with that you have to give a proof of your steady source of income so that the lender is satisfied that you are not involved in any illegal work or such so.
As logbook loans are quite easy and reliable but at the same time they may get quite risky as if you fail to repay the loan at the time mutually agreed or whatsoever then you may wash your hands of the vehicle.