If you are finding it difficult to make ends meet with your day-to-day financial planning, you might be pleased to know that there are a range of short-term solutions able to provide a certain degree of the relief. If you are looking at the availability of the loans that are available to those that don’t have the most desirable credit rating, a logbook loan (also referred to as a V5 loan) might be the ideal option.
One of the more recent types of loans to enter the market includes the log book loans which in effect mean the lender takes short term ownership of the vehicle for the duration of the loan.
What is involved with a logbook loan?
Logbook loans are starting to become a highly favoured and accepted choice when it comes to securing a loan against a registered vehicle. Similar in much the same way as a pawnbroker, a V5 lender is able to offer an amount of money which is related to the value of the belongings and with the logbook loans this will mean the car, truck, or motorbike that is put up as collateral. But, a positive aspect of these loans is that you are able to continue to drive the vehicle for your day-to-day requirements. Since the vehicle is being used as security, the lenders will require holding the original V5 certificates or more commonly referred to as a logbook.
Provided that you are able to keep up-to-date with the weekly or monthly loan repayments, you are fully able to continue using the vehicle and all the benefits it is able to offer. If no difficulties are likely to be expected with managing the loan, this is a very effective means for gaining access to a lump sum of cash which can be used in almost any situation required, with common needs often relating to household bills and expenses. But in those situations where difficulties are starting to be met making the repayments, the lender is within their rights to take the necessary action to have the vehicle repossessed. A situation of this type isn’t likely to happen unless you get severely behind in making the repayments. So, if you are heavily reliant on the vehicle for work, you really want to make certain that you are able to afford at this type of loan.
Who might be eligible to apply?
A quality aspect of the logbook loans is that the criteria issued by the lenders isn’t overly strict and a far-sight easier to comply with then what might be required with the conventional high street lenders. Since the eligibility isn’t so strict, it has made these types of loans that much more accessible to the wider audience. Due to the ongoing financial downturn, most of the banks are very reluctant to lend to businesses and individuals, and as consequence of this is that it is that much more difficult to pass their strict requirements. And essentially this means it is extremely difficult for those with the poor credit rating to have any possibility of being able to get a loan on the market. Due to this, you now have access to the many alternative loan companies that are able to fill any gap that is now seen in the market.
A logbook loan company is the more flexible option when accepting applicants, provided of course they are the legal and registered owner of the vehicle that is being used as security. Whether you have a poor credit history or self-employed, you will certainly find that these loans are able to provide a reliable source of funds in the times of emergencies.
What amount can you expect to borrow?
Generally speaking, the vehicle that you are able to use as collateral for the loan is going to have a significant impact on the total amount that might be granted. Ideally, you want a vehicle that is not older than 8 to 10 years of age, is free of finance, taxed, and insured (fully comprehensive). A loan amount can be in the region of £500 to £50,000.
Similar to any loan that you might away from the main high street lenders, you are likely to see the higher APR charges. They are likely to range in the region of 350% to 500% and the payments are likely to the claimed on a weekly or monthly basis. Prior to approaching the loan companies, you really want to make certain that you have a full appreciation of what you are signing up to and that you are able to easily manage the repayments for the integration of the loan term.