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Jul 01

Discover the top ten things you need to look out for when it comes to loans on car

Posted by:Jonathon Parkinson

top ten things to look out for when it comes to loans on cars

Sometimes things happen which mean you need to gain access to money – fast! We understand that, and that is why log book loans have risen in popularity over recent years.

If you are considering taking out a log book loan, it is imperative that you are fully aware of the loan agreement you are signing before you commit to anything.

We have highlighted ten of the most important points you need to be aware of!

Keeping your car

Although the loan is secured on the value of the car, the car will remain your property and in your possession for the duration of the loan agreement term. Your car will stay yours unless you break the agreement by not paying your loan. However, a company only has the right to take your car as a last resort to reclaim its money back and only AFTER sending the relevant letters, as per the Consumer Credit Act 1974. If you do experience financial difficulty during your loan period, AutoMoney would try to work with you to sort out an acceptable repayment plan before further action is taken.

Application Process

It is a wise idea to check that you have everything needed for your application before you apply. Check the lender’s website to see what they need you to bring in order to process your application.

Ask about grace periods

Find out whether the lender offers a grace period. This is a period in which you can change your mind and cancel the agreement, paying back what you borrowed without incurring any additional interest charges. Also, check the charges for a missed payment or a late payment, just so you are fully aware before you sign anything.

How Quick?

Of course, one of the reasons you may be considering a log book loan is because you need the money for an unexpected emergency. Ask how quickly you will be able to access your funds once the agreement has been accepted. With AutoMoney, the money agreed is deposited into your account within one hour of approval in most cases.

A bad credit history

Be honest with your lender – if you have a bad or poor credit history, make sure you let them know and do not lie on the application. Make sure that you ask from the outset whether the lender will accept an application from someone with a poor credit history, so that you do not waste any time. At AutoMoney, we are happy and proud to say that we will consider applications from those with bad credit histories and will not discriminate.

Fixed repayments

Before signing an agreement and handing over your card details, ask about the repayment plan on the loan. Ideally, you want to sign with a lender who offers fixed repayments, meaning that you know what amount is due to come from your account each month, and you know from the start what you need to budget for.

Early settlement fees

It is also important that you ask about early settlement fees. If you were to find yourself in a position to pay off your loan quicker than first expected, will your lender allow it? And if so, how much will you have to pay to do this? With an AutoMoney log book loan, we actively encourage our customers to pay their loans back early if possible, and we do not charge for this. And best of all, if you pay back early with us, you will save on the interest due for the outstanding period!

Reputation

These days, people consider reputation for most things; places to eat and shop, places to visit on holiday and now, log book loan providers. Check out the reputation of your lender online and ask around – make sure you have good feeling about the loan and company before you agree to anything.

How much can you borrow?

You are typically able to borrow around 70% of the value of your car, up to a limit of course. AutoMoney offer log book loans from £500 - £5,000, but make sure that the lender you go with doesn’t force or encourage you to borrow more than you need. Work out what you need beforehand and stick to that amount.

Gut feeling

How do you feel about your potential lender, their reputation and their offer? Follow your gut feeling before signing the paperwork and agreeing a deal. Don’t be afraid to ask more questions or leave for thinking space if you are not 100% sure! 

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Borrow with confidence

We are PROUD MEMBERS of The Consumer Credit Trade Association. AutoMoney were forerunners in the creation of The CCTA Lending Code of Practice and we adhere strictly to its principles. Click here to view. ALWAYS MAKE SURE THE LENDER IS A MEMBER.

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.