What exactly is a logbook loan?

When you buy a car, the document that identifies you as the owner of the car in the UK is known as a car logbook. A logbook loan therefore is a type of loan where a person’s car is used as collateral on the amount secured as loan. When applying for a logbook loan, the applicant is supposed to sign a bill of sale agreement which is proof that they have temporarily transferred ownership of the car to the lender. In addition to that, the applicant hands over their car logbook to the lender and it remains in possession of the lender throughout the period of repayment.

What is the process of applying for a logbook loan?

Applying for a logbook loan is a simple process. All you need to do is identify a UK logbook loan lender of your choice, hand over the car to be used as collateral for inspection, hand over your car logbook loan, deliver the required documents and approval of your loan will be within hours.

What do you need to provide prior to being approved for a logbook loan?

Apart from being a person of sound mind, a UK citizen and a person of legal age, there are a number of documents you need to provide. For one, you need to prove beyond any reasonable doubt that you are a citizens of the UK by producing your identity card, utility bills that are proof of address, car insurance as well as tax details, Ministry of Transport (MOT certificate) that shows proof your car is in good condition,

What kind of car, van or motorcycle cannot be accepted as collateral for a logbook loan?

While UK logbook loan lenders accept all types of car models as collateral. There are certain instances when they won’t accept certain types of cars to be used as collateral. For one, if the car you put up as collateral is not registered in your own name, it won’t be accepted as collateral. Secondly, if the car you set up as collateral is unroadworthy or rather in bad condition, it won’t be accepted as collateral. Thirdly, if the car has any form of financing attached to it, it cannot be accepted as collateral.

Do I need to have a good credit score to be considered for a logbook loan?

No. the amazing thing about logbook loans is the fact that your credit score is not an impediment in your efforts to get approved for a logbook loan. Logbook loan lenders do not focus on your credit score when screening your application and therefore you can be rest assured that you will be approved for a logbook loan irrespective of whether you have a history of arrears, CCJ or defaults.

What is the period of repayment for logbook loans?

Ordinarily, a person is at liberty to repay logbook loans for a period of up to 78 weeks. The onus is on you to decide whether you are comfortable with weekly repayments, biweekly repayments or monthly repayments.

Is there penalty for early logbook repayments?

We do not penalize you if you manage to clear your logbook loan early. In fact, we encourage our customers to clear the loans in shortest time possible to avoid defaults and manage their money well.

What happens in the event I am unable to fully repay my logbook loan?

As a rule, we encourage our customers to get in contact with us should they experience bottlenecks in repaying the loan. We are cognizant of the fact that financial situation might change and therefore we always try to draft a new agreement that will make it possible for you to meet your monthly obligations. However, if you keep mum and our communication to you remains unanswered, we might consider the last resort of repossessing your car.