What's the Difference between Logbook Loan and A Payday Loan?
The Logbook loan should not be confused with a payday loan. Both types of loans are generally very accessible as long as the borrower accepts the lenders lending criteria before borrowing their money. The key benefits of using a payday loan and a logbook loan is that they both offer an instant decision and you can receive the money on the same day with very little fuss.
A logbook loan is a different type of loan to a payday loan. A payday loan is a short term unsecured loan that permits the borrower to borrow money up to £750 at any one time and the money borrowed needs to be paid back in full with interest before the next pay day.
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A Logbook Loan Resembles A Secured Homeowner Loan
It works in a similar way to a secured homeowner loan which is based on a property that is owned by the person borrowing the money. The property or the home will then be held as security by the lender if the loan is not repaid or the borrower defaults on the repayment arrangements. The borrower could lose their property if they do not keep up their agreed repayment schedules.
The money borrowed is secured on the borrowers motor car logbook or the vehicle registration document. With a logbook loan you are able to borrow larger amounts of money up to £50,000 as long as your car is worth that sum of money. The finnace provider will usually spread the installments over longer repayment term as long as the payments can be met.
Anyone taking out a loan needs to be over eighteen years old and be a resident in either EnglandorWales. The car being used for a logbook loan must have no outstanding finance, and the borrower needs to be able to afford the monthly repayments. A logbook loan is not dependent on the borrower having an A1 credit score as there are no credit checks required by the lender as part of the application.
The application process is in two parts, the first stage starts off with either a telephone call or by completing a web-based application form. After the lender has received the application form, they will contact you to arrange an inspection of your motor car and to see the cars logbook. At this inspection they will value your car in order to figure out how much you are able to borrow. They will make you an offer and calculate your monthly repayments. If you wish to proceed with their offer then they will need to see some proof of your monthly income. So that you can complete the finance arrangement the loan provider will require you to and sign their agreement forms and for you to leave your logbook with them. Once all the paperwork is finished they provide you with the money in the way of a cheque
Benefits and Problems Of A Loan
To summaries the key benefits of this kind of finance. There are no credit check necessary to see if you are in a debt crisis, your credit history is irrelevant, self-employed people are accepted, up to £50,000 can be borrowed and the repayment terms can be spread over a longer period. The stumbling blocks to watch out for are your car can be sold if you do not keep up your monthly logbook loan repayments at all times and your vehicle should be free of any outstanding finance and you do need to be the owner of the car and have a valid vehicle logbook
If you are applying for a logbook loan or payday loan you should tread with caution and only consider this option if all the other avenues are closed. As a borrower make sure that you fully understand the amount of money you are borrowing, the interest rate being charged as well as the total amount of money to be repaid by you. It is very important that anyone borrowing money from either a loan or a payday loan company must always read the terms and conditions and if you are not sure then take advice first before going forward.
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