Lately, we have received more and more queries about logbook loans. These are becoming a popular source of credit for people who have paid off their vehicle and can now use it as collateral on the loan.
A logbook loan works in a very simple manner. Basically, you are able to secure a loan against the value of your vehicle, be it a car, a motorcycle, caravan or truck. Loan applications are quick and simple and money can be in your bank account within 24 hours.
So how do logbook loans work?
Well, if your vehicle is paid off, it is a valuable asset, especially if you have kept it in good condition. To apply for a logbook loan however, there are a few things you need to consider.
- You must be the registered legal owner of the vehicle. It cannot belong to your wife, parents, friend or sibling. If it does, they must apply for the loan. You will be asked to provide proof of ownership when applying.
- The vehicle must be fully paid up. No vehicles under a finance plan can be considered for a logbook loan. Why? Well, during the duration of the loan, the loan company effectively owns the vehicle, so if it still had finance on it, this would not be possible.
- You need full and comprehensive insurance. This covers the lender in case you damage the vehicle in an accident during the terms of the loan. It also protects from theft and weather damage.
To secure an amount of money paid into your account, your vehicle needs to be assessed. The loan amount is then based on that assessment but is never more than 50% of the value of the vehicle. You will need to provide a number of documents during your application including identity, proof of address, payslips, bank statements and the MOT certificate of your vehicle.
Most loan companies will allow you to apply online but bear in mind they will have to see your vehicle to assess it. Once approved, the money is paid into your account in no less than 48 hours.
Visit logbook loans UK for more information on this versatile loan option.