Logbook loans have become one of the most popular options of borrowing in the short term. Logbook loans are loans borrowed against the car. If you own a car or have a high equity value in your car, you easily borrow against it because the higher the value of your car, the higher the amount of money you borrow.
However, when you apply for a logbook loan, the car remains the property of the lender until the loan is fully paid. You are allowed to keep the car as long as your remittances are made according to the agreed terms and conditions.
The appeal of logbook loans lies on the premise that you can get quick cash without having to go through numerous and heartbreaking pre-approval procedures.
Some of the main advantages of taking logbook loans include; no credit checks and no limits on how you spend your money. Most logbook loans in the UK, offer between £500 to £50,000, but this depends on the value of your car.
Certain companies allow car owners to borrow up to 50% of the value of their cars. The downside of log book loan includes high interest rate, risk of repossession and inconsistent debt collection practices.
One prudent strategy to overcome the risk of default and high interest is making reasonable over-payments. The interest on logbook loans is often paid charged on a weekly or monthly basis. Finally, when you are applying for a logbook loan it is very important to read and understand the fine print.