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Jun 09

What are log book loans? Find out everything you need to know about them!

Posted by:AutoMoney

Unfortunately, more people are feeling the need to borrow money than ever before. It is no secret that the past few years have been a struggle for most people living in the UK. Not only have people had to deal with the effects of the recession, but rising living costs as well. This has left a lot of people needing to borrow money. One solution they have turned to is a log book loan. Read on to discover all you need to know about them...

What is a log book loan?

This is a loan that is secured against your vehicle. You won’t have to hand over your car, however, you just need to hand over your vehicle’s logbook – hence the name. Most companies allow you to borrow up to 70 per cent of what your car is worth. This is a short term lending solution, which means you will typically have between six months and two years to pay it back. Thus, this is an option for those who want a bit more flexibility than a payday loan.

How do log book loans work?

Log book loans are secured on your car, so the amount you can borrow will depend on the current value of your car, which will usually be determined by the use of the Glass’s Guide or similar valuation tool. The lender will then explain how much they are willing to lend you and, if you are happy with this figure and the repayment terms, you will sign a contract. This contract basically grants the lender temporary ownership of your vehicle. Nonetheless, they will only take your car if you fail to make the repayments you have agreed to.

Who is eligible for a log book loan?

Evidently, you will need to be over the age of 18 years old and have a driving license. The car in question must be yours and be paid for in full. In addition to this, you will have to prove that you are capable of making the repayments. Therefore, the lender is likely to ask you for income slips or something similar. Every lender is different and thus some may ask for other documents as well.

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350.5%APR Representative
Representative example: Loan amount £1000. Duration 18 months. Repayable by 16 monthly repayments of £170.42 and one of £198.42 (includes Bill of Sale registration fee of £28) commencing two months from the date of the loan. Total amount repayable £2925.14. Rate of interest 187% per annum fixed. Representative 350.5%APR. LOANS ARE SECURED ON YOUR CAR. The vehicle may be repossessed if you do not keep up the repayments.