Most Commonly Asked Logbook Loan Questions

Are logbook loans primarily for individuals with bad credit?

Not exactly. When the idea of logbook loans were first mooted, the goal was to target individuals with bad credit or those who could not avail credit facilities because they had a history of arrears. However, the reality of the matter is that anybody can apply for a logbook loan if they so wish in as much as the biggest chunk of customers for logbook loans are those with a poor credit rating.

Do you offer logbook loans with outstanding finance?

One of the conditions we have prior to approving your loan application is that your car should be from any financial attachment. We would therefore be inclined to decline your application in this respect. That said, there are instances where we might still be able to provide logbook loans with outstanding finance especially if the outstanding debt on your vehicle is negligible.

 

What basic requirements do I have to meet in order to avail a logbook loan?

The beauty about our logbook loans is that the requirements are pretty simple and basic. For one, we insist that you must be a bonafide UK citizen who is of sound mind and above the age of 18 years. Secondly, you must be owning a car that you are willing to set up as collateral and be residing within the UK. So long as you meet the aforementioned, you are good to go.

Can I use a vintage car as collateral?

The rule of thumb is that the car you set up as collateral need to be a model that is not older than 10 years or rather has not been operating on the road for more than a decade. That said, there are instances where we consider classic and vintage cars especially if they are well maintained and in good condition.

Can I use my spouse’s car as collateral for my logbook loan?

Unfortunately, that is not possible. We need you to set up as collateral a car that is registered in your own name. You cannot transfer ownership of a car that you do not legally own to us. It will definitely create legal bottlenecks and would make it very difficult for us to enforce the contract we agreed upon should there be any problems.

I will be 18 years in a couple of days. Is it okay for me to apply for a logbook loan?

There are a number of things we consider before approving your application. One of the things is that you need to be an adult of sound mind not to mention show proof that you receive income on a regular basis. In essence, if you are yet to be 18 years, it will be impossible for us to consider you for a logbook loan as you are a minor. In fact, any agreements will not be enforced in any court of law not to mention that it’s illegal in the UK to enter into a contract with a minor.

How is the flexibility of the repayment?

It is actually up to you to decide how frequently you wish to be making repayments. You can decide to be making weekly repayments, biweekly repayments or even monthly repayments.

What is your preferred mode of making repayments?

While there are a number of ways you can make repayments for your logbook loan. We prefer you set up automatic deduction from your bank account. This makes it easier for you to be on top of repayments and drastically reduces chances of you defaulting.

Any risks related to defaults?

Of course there are! First and foremost, defaults negatively impact your credit score and inability to service your loan could see you losing your car. Please be advised that this is usually a measure of last resort!

How to improve chances of approval for a logbook loan as well as how to reduce chances of car repossession

You will agree with me that if you have bad credit and have literally been turned away on numerous occasions every time you sought for a loan from mainstream banks, chances are that you are bound to be hasty when making financial decisions especially where credit checks are not an issue. Most individuals with bad credit have found themselves in unfamiliar territories when they haphazardly agreed to a contract without understanding how the said contract will affect them. Essentially, this desperation from bad credit individuals is what unscrupulous logbook loan lenders take advantage of to swindle individuals and ensure that they are forever indebted to them.

Applying for a logbook loan should be something that is well thought out, informed and not done in a haste. It is imperative that you take measures to understand how the terms and conditions of the loan will affect you prior to signing on the dotted line. That said, how can you improve your chances of getting approved for a logbook loan? No doubt, the belief is that since credit checks are not an issue, getting approved is assured. Well, this is not is always the case as approval is premised on a number of factors.

For one, to improve your chances of approval, ensure that you are of age, reside within the UK, receive salary on a regular basis or rather show proof that you can service your loan and maintain your car on a regular basis. While this is essentially what many logbook loan lenders insist on, the truth of the matter is that it’s not enough to secure you a logbook loan. In addition to a car that is in good condition, the tax and insurance details of the car must be in order. What this simply means is that even if you meet the eligibility requirements and your car insurance and tax details are not in order, then you can forget about being approved.

Secondly, you need to have a Ministry of transport (MOT) certificate that essentially shows that your car is road worthy. The car must also not be older than 10 years old. Therefore, if you are keen on getting approved at the first go, it’s imperative that you ensure all the above are in order as lack of one or two could see your application rejected.

Now that we’ve looked at how you can ensure you get approved for a logbook loan, let’s take a look at how to reduce chances of your car being repossessed. No doubt, the fool proof way of ensuring that your car is not repossessed is by being prompt in payment. In other words, you should be on top of your repayments and not default. However, we both know that things happen and at times we are forced to default. When this happens, it is imperative that you don’t go under or cut communications with your lender.

Most logbook loan lenders resort to car repossession due to lack of communication or because the borrower simply goes mute and doesn’t respond to communication on why they have fallen behind. If you experience financial problems, approach the lender and explain why that is the case. Try to make them understand and if your lender is understanding, there is a high probability that they will work out something with you rather than resort to repossessing your car.

In conclusion, logbook loans if utilised are a great way to resolve your financial issues when you are between a rock and hard place. Consequently, if utilised badly, they could make your financial situation worse than it was before you took out one. Always make an informed decision and only borrow what you can afford to repay!