Log Book Loans - What Are They?
If you are thinking how to obtain hassle-free cash in a few hours, consider log book loans. This popular form of borrowing allows receiving the necessary money against the value of your car. The statistics for 2009 showed that 40,000 loans were made by March, 2009 with the total borrowing sum of nearly £30 million. So what are log book loans?
1. The origins of the concept
The concept of using a possession other than a house or land as security for a loan dates back to the 19th century when the Bills of Sale Act and its amendment were drawn up. In the case of a logbook loan, the customer is using their vehicle as security for the loan. The log book, used as collateral, contains details about the vehicle owned by the potential borrower. In cases where the borrower fails to repay the debt, the lender has the right to repossess their car and sell it.
- The benefits of log book loans
Logbook loans are currently popular due to a great number of benefits they offer to potential borrowers.
· No credit checks needed
If you need money but are struggling with other bills, log book loans can be the first port of call. You can receive a loan against your car even if you’ve been turned down by other lenders. Your current income is the main indicator of your creditworthiness so if you’re employed, you’ll probably be granted a loan. Even bankruptcy in the past is not an obstacle.
· Quick application procedure
You can apply for this loan from the comfort of your home. Lenders set the maximum sum which can be granted against your car value – but typically up to £5000. The exact loan amount may depend on your vehicle details: car make, car model, car year and a few others.
In 2009 rumours began about plans to ban log book loans under numerous proposals. The Office of Fair Trading received complaints from consumers about insufficient protection this type of borrowing entailed. Nevertheless, the concept of log book loans is still relevant – it is one of the quickest way to obtain necessary cash without having to submit detailed documents to lenders.
