Logbook loans – everything you need to know

Granted, there are a few loan products in the UK market that UK citizens with a poor credit rating have guarantee of approval. From time immemorial, individuals with a low credit score have had a rough ride every time they sought to be considered for a loan. High street banks were unwilling to give them the benefit of the doubt and the result was despair, stress, and depression. Of course, we only can imagine how bad it was for bad credit individuals during emergencies. While this was largely how things were in the past, the emergence of bad credit loans such as logbook loans have indeed changed the situation for the better.

As the name implies, this is a loan product where a person needs a car as security to secure it. In other words, you don’t have to worry about having a perfect credit score or anything like that. So long as you legally own a car, you are good to go. In order to be approved for a logbook loan, you will basically sign off your car in exchange for the loan. However, this does not mean that you lose possession of your car. While your car becomes the property of the lender for the duration of the loan, what the lender holds on to is the car logbook while you continue driving your car and even using it for income generation for the duration of the loan.

Is that all? Well, legally owning a car is one of the prerequisites but not the only thing. In fact, there are a couple of other factors you need to meet before your application can be approved. In addition to legally owning a car, you need to be residing within the UK and be a bonafide citizen. What this essentially means is that visitors to the UK or those who are there temporarily cannot apply for a UK logbook loan. You also need to be an adult and not a minor to be able to be considered for a logbook. The reasons are quite obvious really. Minors cannot legally enter into binding contracts and any such contract is considered null and void.

That said, the car you provide the lender as collateral needs to be in good shape, undergo maintenance regularly, be fully insured and not have been on the road for a period exceeding 10 years. When you have all the aforementioned in order, getting approved and getting the money you need should take only a couple of hours. Of course, the benefits of applying for a logbook loan is the fact that you have peace of mind and assurance that you will be accepted irrespective of how poor your credit rating is. Secondly, if you meet your obligations as envisaged in the contract without defaulting, you stand to positively influence your credit rating over a period of time. The ease of application and the fact that you have access to a comparatively large sum of money compared to other bad credit loans is one of the reasons as to why logbook loans continue to gain popularity in the UK.