Logbook loan

Logbook Loans Explained


We all hit a financial emergency or two at one point or another. If you have a sufficient emergency fund then this financial bump wouldn’t hurt. However, the same is not the case for most people. When you don’t have ample savings to tide you up until you’re on your feet financially, taking out a loan is inevitable.

Logbook loans, in particular, are a popular option for people with bad credit. Logbook loans have helped thousands of borrowers in the UK. And if you are planning to take out one, understanding the financial product would help. And we’ve created this guide to help you do just that.

What is a logbook loan?

Logbook loans are secured loans offered for people with bad credit. Even if your creating is less than perfect and you’ve been rejected for a loan elsewhere, you can count on this financial product to save the day. Logbook loans, in essence, will cash in on your vehicle’s official trade value. This puts your vehicle as collateral for the loan, which also means you can borrow more, usually up to 70% of the vehicle’s trade value.


How much can you borrow?

With logbook loans, the usual offers start from £500 up to £50,000. Repayment terms, on one hand, start from 12 months up to 36 months. For smaller loan amounts, the term may sometimes last only for weeks while for larger loans, the term may be extended to longer than 3 years. Either way, your goal as borrower is to never miss a payment to avoid hefty penalties.

Who can apply for a logbook loan?

Anyone who is a vehicle owner and who lives in the UK can apply for a logbook loan. Naturally, you have to be of legal age as well as working full time to be eligible. One of the major things your lender will need is your proof of income in the form of your recent pay slips. Sometimes, they’ll even ask you to provide bank accounts just to prove that you are financially capable to repay the loan. Other documents you need to prepare include you vehicle’s MOT certificate, insurance and especially the logbook document.

How much does the loan cost?

Logbook loans can be very costly. Considering that it is a loan specific for borrowers with bad credit, the interest rates can be pretty steep. In fact, the representative APR for a typical logbook loan deal is 400% or more. Compared with traditional loans from banks for borrowers with bad credit, the difference in interest rates is astounding. But such is one disadvantage and consequence you need to embrace for having a poor credit history.


What are the risks involved?

Logbook loans are not only costly but it’s quite risky as well. The high risks involve the possibility of losing your car to your lender. When you get approved for a logbook loan, you’ve essentially agreed that ownership is no longer yours until the loan is repaid in full. But then a lot can happen in between. If you stumble into another emergency and you miss several repayments for your loan, your lender may enact on the nonpayment by recovering your vehicle. If this happens, you have to update your payments as soon as possible to get your car back again.

Should you apply for one?

Because logbook loans are risky, you should only apply for a deal when you know you can handle the monthly repayment without hitch. Like with other loans, there’s no secret. You just need to be a responsible borrower and repay your liabilities on time each month to avoid repossession.


Things to Keep in Mind When Taking Out a Loan


Borrowing money is an important financial move that can do more harm than good if not done right. There are financial consequences that can wreak more havoc on your credit score if you don’t plan well. Before you take out a loan and any type of loan for that matter, there are things to keep in mind. Below are some things you can start with:

Borrow only what you need

When you borrow money, it is sometimes tempting to borrow more especially when you’re eligible to do so. But that can be a mistake you don’t want to commit. A wiser move you should rather do is to keep the borrowing within your needs. Then it will be easier to repay the loan as planned.

Make sure you can afford the monthly repayments

Another key thing to remember is to make sure you can handle the monthly repayments. This is why borrowing beyond your means is a big no-no for responsible borrowers. You don’t want to put yourself in a hotspot. If you can’t afford the repayments, chances are high you’ll end up in even bigger trouble in the end with hefty penalties and skyrocketing interest rates.

Shop around and compare deals

Don’t sign up for the first cheap deal you find. In order to find the best deal available, take your time by shopping around from different providers and lending firms. Then compare similar deals. Look at their representative APRs and base your decision on the potential cost of the loan. Obviously, you should go for the deal with the cheapest interest rate available. Only then will you be able to insure that you’re getting the best end of the deal.

Find out more about hidden fees, penalties and other charges

Don’t stop with comparing APRs when choosing your loan deal. Go the extra mile by allotting some time to find out more about hidden fees. Lenders can be tricky and before you knew it, your loan’s cost may have already spiked up because of hidden fees. To avoid that from happening, do the proactive approach by calling your lender and ask about hidden fees, early repayment fees and other related charges. Your goal is to know all the details so you won’t get the shock of a lifetime once the repaying starts.


Loan, Uncategorized

Loans: What You Need to Know


If you’re not careful and if you’re a novice at borrowing money, loans can be a pain in the neck. They come in many forms and types that it can be confusing to choose one that is right for your needs. But don’t panic. Getting the right loan may not be easy but we’re here to help. We’ve created this quick guide to loans to tell you everything you need to know about the financial product.

Two major categories of loans

There are two major categories of loans. Most loan types fall into these two categories. There are the secured loans which are loans that require collateral or security and there are unsecured loans which doesn’t need any collateral.

Secured loans are harder to get approved for because of the collateral requirement. But the upside, you can borrow more money with secured loans. Examples of secured loans include mortgage, which is secured on your home, car loans secured on your vehicle and logbook loans.

Unsecured loans, on one hand, are more accessible and easier to get approved for. But the loan amounts are significantly less than what a secured loan may offer you. Unsecured loans are usually ideal for quick cash personal needs like car repair, overdue bill, etc. Examples of unsecured loans include payday loans, doorstep loans, credit cards, guarantor loans and most types of personal loans.


Places to get loans in the UK

If you’re in the UK and you’re of legal age, you can avail a loan from different place. If you have a good credit score, for instance, you can go directly to your bank and apply for a personal loan. There are also internet loan providers. Rather than go to high-street banks and building societies, you can go online and look for trusted provider to apply for a loan. Borrowers with bad credit will usually find a suitable loan online.

Cost of loans

When you’re looking for a loan, one of the key concepts you’ll stumble upon is APR. It stands for annual percentage rate, the financial concept used by providers to advertise their loan products. It basically represents your loan’s cost inclusive of fees and related charges in a year. Take for example logbook loans. Providers offering this type of loan advertise their deals with a representative APR of 400% on average. That gives borrowers an idea how much the loan may cost in a year. That also means that if you want to find the cheaper deal, you should go looking for one with the lowest APR.

The Credit Score Factor

Interest rates vary from one loan type to another. Secured loans with long repayment terms usually come with lower interest rates while high risk loans such as logbook loans come with high interest rates. Another factor that may affect your loan’s cost is your credit score. If you have a good credit score, you’ll be able to get the best rates available. If you have a poor credit score, on one hand, your loan may be more expensive because of the higher interest rates.

Consumer Credit Act

If you were going to take out a loan, it would help to know about the Consumer Credit Act. The act offers protection for borrowers. It requires lenders to disclose full details in written form about the true interest rate of your loan. It also gives the borrower a period called the “cooling-off” period giving you time to think about going for or cancelling the loan agreement.

Loan Options

5 Loan Options for People with Bad Credit

family of four on grass with hands up and dream

People with bad credit often have a hard time getting approved for a loan especially from major banks and lenders. This is understandable considering the borrower’s poor credit history. There’s too much risks involved on the part of the lender that you’ll probably get your application rejected if you have bad credit. In this case, bad credit loan options may come in handy.

Bad credit loans, as its name suggests, exist to cater to people with bad credit. There are different types of bad credit loans available in the market and below are some of the most common options you can check out.

Payday loans

Payday loans are popular in the UK and for good reason. If you are employed and you suddenly need quick cash, payday loans offer a convenient solution to your financial emergency. It’s convenient because approval is fast and the requirements minimal. So long as you can provide proof of income, your application is as good as approved. You can borrow from £100 up to £1,000, which you can repay on your next paycheck. On the flip side, the loan is astoundingly costly at 1,000 representative APR on average.

Doorstep loans

Doorstep loans are personal loans for people with bad credit. The offers usually start from £100 up to £1,000 or maybe more depending on your financial situation. Like payday loans, the attraction of this type of loan is its offer of convenience not to mention the quick, hassle-free cash when you need it most. The loan is brought directly at your doorstep hence the convenience. If you meet the requirements and you want to apply for the loan, you can get approved in 24 hours or less.

Guarantor loans

Guarantor loans are not as easy to get approved for as the other two loans above but this one offers larger loan amounts. With guarantor loans, you can usually borrow from £500 up to £7,500 or sometimes £10,000. But in order to get approved, you need to meet one key requirement. You need to provide a guarantor who will agree to co-sign the debt agreement with you. And it’s not just any guarantor. The guarantor must be of legal age, a UK resident who is a homeowner and he or she must have good credit. If you can find a guarantor, you’re in luck because then you’ll be able to enjoy this type of loan’s lower interest rate.


Logbook loans

If you need a larger amount of money for a financial emergency or any major personal need, logbook loans may be the best option for you. Unlike the other loans, this one is a secured loan that involves your vehicle as collateral. This means you can borrow more, usually from £500 up to £50,000. But the flip side is you’re risking your vehicle to repossession in case of missed payments. You can lose your vehicle, which means extra caution is needed if you’re going to opt for this type of loan.

Peer to peer loans

Peer to peer loans are another type of loans that are becoming more and more popular in the UK. Rather than go to banks to take out a loan, you can go online instead and borrow directly from a “peer.” The peer is your borrower, which means no middleman. The interest rates are usually lower than most types of bad credit loans. Most lenders in this platform, however, may require you to have good credit to be eligible for a loan. Fortunately, there are some who understands your situation who is still willing to lend you money even with bad credit. Your job is to look for those lenders in order to raise quick cash.