Log Book Loans
In the current economic climate log book loans have become very popular along with many other forms of short term or micro loans. If you own a vehicle you can use log book loans to help you with your cash flow.
What You Need to Get Log Book Loans
To qualify for log book loans you need the log book of your vehicle. This proves that you are the legal owner of the vehicle, so it must be the original not a copy.
Most companies require the vehicle to be fully comprehensively insured. The reason for this is that the loan is secured against the vehicle. If you were to skid on ice and hit a lamppost writing the vehicle off the logbook loan company would have lost the asset the loan is secured against i.e. the car.
There must not be other outstanding cheap loans against the vehicle. A few companies will consider loaning against a vehicle with outstanding finance in certain circumstances, so it is worth checking.
The vehicle needs valid tax and a valid MOT. Without these many insurance policies are null and void, plus the police could impound or seize the vehicle. Again this would leave the logbook loan company without access to their security i.e. the car.
You have to prove that you have enough income to pay back the loan. However, a bad credit history is normally not a barrier to getting this kind of loan.
Some loan companies only offer loans against vehicles with less than 100,000 miles on the clock. This reduces the risk of the car being scrapped due to mechanical failure by the owner, again leaving the loan firm with a worthless piece of security.
Typical Terms and Conditions for Log Book Loans
The terms and conditions for log book loans usually allow you to continue to use your vehicle. However, you have to keep it MOTed, taxed and insured. You must pay the loan and interest back according to the agreed schedule. Failure to do so can result in your car being seized and held by the company until you make the outstanding payments.