Logbook loans have become the ideal solution for those who would like to take out a loan but who want to take advantage of a faster and easier loan than most. The beauty of logbook loans is that your vehicle will basically serve as your collateral for the loan, and you are essentially ‘selling’ your vehicle (at least on a temporary basis) so that you can get some much-needed cash. But before you apply for a logbook loan, there are some essential considerations you have to think about. Here’s what you should really think about before taking out a logbook loan.
It’s only available in Wales, England, and Northern Ireland
Logbook loans are only available in Wales, England, and Northern Ireland; if you are in Scotland, the closest type of loan you can get to a logbook loan would be a conditional sale agreement or a hire purchase agreement. If you are in Scotland and a lender offers you a logbook loan, be careful – it may not be what it seems, so go carefully through the agreement so you know what it entails.
It comes with a bill of sale
A logbook loan requires you to sign a credit agreement, but apart from this, you will also be signing a bill of sale. This essentially means that the lender will now be the temporary owner of your vehicle until your loan is repaid. You can still use your vehicle, and the bill of sale will have to be registered by the lender at the High Court before it is acceptable. If the bill of sale is not registered, your vehicle cannot be repossessed by the lender unless they get court approval first. You can also confirm if the bill of sale for a logbook loan is really registered by submitting an application in writing to the London Royal Courts of Justice.
The length of the loan and the interest rates
Logbook loans often have a limit of about 78 weeks, but you also have the option to pay it back before the end of the agreement. Depending on the agreement, you may only be required to repay the loan’s interest until your agreement’s last month, which means that you will have to pay the original amount you borrowed in the last month.
The standard annual percentage rate or APR for a logbook loan would be around 400%, sometimes higher. For instance, if you were able to borrow £1500 with repayments of £55 per week for a total of 78 weeks, then your entire repayment would be more than £4250. But once again, the interest rate would depend on the lender. Some lenders, such as www.carcashpoint.co.uk, charge lower interest rates and don’t carry out credit checks, so it’s worth doing some research so you can get the deal that’s right for you.
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