If you need a personal loan and facing trouble either finding a low rate or getting eligible, you may need to turn to secured loans. If you are thinking of whether can you mortgage your car to get a loan then the answer will be yes. An individual can get a loan against his or her car. Several banks provide the facility of loan against a car at a reasonable interest rate. The best thing about a loan against a car is that it is a cheaper alternative compared to others.
Can I get a loan for my car?
Most of us perhaps heard about loans against property such as gold, FD, and so on. But it is a good choice to mortgage your property. You would hear that your car can also help you at the time of your financial needs. This process is more secure and simpler than other unsecured loans. You can put your car as a mortgage to get the required amount of money from several banks. Besides, some loan providers can guide you to get the loan.
What is a logbook loan?
A logbook loan is a loan granted against a vehicle. By issuing your vehicle’s logbook you are verifying that you are the registered owner of the vehicle. You can loan an amount of money while still being able to use the vehicle. A logbook loan is a very quick, instant loan for car and vehicle owners.
While you are taking a logbook loan you need to hand over all the relevant documents to the lender until you have cleared all the payments of your loan. Once you have cleared all the loans you will get your logbook.
Logbook lenders will provide a loan worth up to a certain percentage of the value of your vehicle. That amount you have to repay within a specific period. Logbook loans have come with very high-interest rates, so it is the most expensive way to borrow money.
What type of vehicle or car can I take a loan out against?
The vehicle loan providers allow you to withdraw instant cash from your car in the form of a secure logbook loan. Though your car is used as a security of the loan for the duration of the loan, you will not able to use the car in the same previous way. There will be some interference from the loan providers.
Loan providers offer loans to a variety of vehicles such as cars, vans, caravans, motorhomes, motorbikes, boats, light aircraft, etc. that you own outright can all help you to borrow cash ranging from £500 to £100,000 over one to three years. However, the amount depends on how much your vehicle is worth and how much you are capable of repaying your loan.
Who is eligible for a logbook loan?
Anyone is eligible for a logbook loan if he/she possesses these criteria:
- Age must be above 18
- Must own his/her vehicle outright, and must be registered his/her name as an owner of the vehicle.
- Must be a permanent resident of England, Wales, and Northern Ireland.
- The vehicle must be fully taxed and insurance
If you are applying for a logbook loan then the loan providers must consider if you can afford repayments and make a credit check before making sure your application to approve or not. But your loan is secured against your vehicle, so the loan provider may be willing to provide you with a loan even if you have a poor credit score.
Why choose a logbook loan?
If you need cash fast for an unexpected urgent household emergency, sometimes you can’t wait for the approval of the bank, then applying for a logbook loan will help you to get cash in a hurry.
However, some people might be hesitant for going through a logbook loan as they don’t have a clear idea about logbook loans. They might be worried about the process of applying for a logbook loan.
There’s nothing to get fear about applying for a logbook loan. There are some benefits as you can still drive your vehicle after you have taken out the loan. You can feel free to ask any queries to the loan company before signing up to decide if you are happy with the terms or not.
How can I apply for a logbook loan?
You can set up an appointment with the appropriate loan provider or one of their nationwide representatives will meet you at your home or any other location as per your choice. Their representative will help you to fill up the form and will make the process easier. Once the form is completed and submitted the team will review the arrangements as soon as possible. If all the eligibility criteria match you then a money transfer will be made quickly to your bank account.
What documents do I need?
When you are applying for a logbook loan then you will be asked for a few documents by the loan provider such as:
- Your vehicle’s log book or your vehicle’s registration document
- Your photo identity proof
- Signing a loan contract with the loan company
Factors to think about before taking out a logbook loan
- In a logbook loan, the APR is very high, so it is suggested to clear the loan as soon as possible.
- Logbook money lenders might be asked you for weekly payments
- There might be some extra charges if you make any early repayment.
- The amount of borrow depends on the value of your vehicle.
- If your vehicle has existing finance against it, you are still eligible for a logbook loan.
- If you are not sure about the number of your back repayments then you should ask your lender to provide a statement of that, which the lender must give you.
What are the advantages and disadvantages of a loan against a car?
Advantages of a loan against a car:
- Access to instant money:
If you need a large amount of credit, probably you don’t have the time to be approved by a bank then taking a loan against a car is the best option for you as the lenders could transfer the cash into your account within an hour.
- A poor credit record may stop you to get a loan:
If you have a poor credit history then it would be very difficult to arrange funds in an emergency, then the logbook loan will be the best choice.
If you have decided to take a loan against your car then you should always choose a company that makes the repayment options and the interest rate is very clear.
- Easy to repay the small weekly installments:
If you have decided to take a logbook loan then it will be very easy to repay the loan as you will be able to set up a weekly repayment schedule.
Disadvantages of a loan against a car:
- You could lose your vehicle if you will not repay the loan to the loan company
- You must be the legal owner of the vehicle, which has to be worth above £500 usually without any finance outstanding on it.
- The APR is much higher than the unsecured loans; you have to struggle to make the repayments back.
Do I have to hand over my car to get a loan?
No, you will still be able to use your vehicle. However, technically you don’t owe the vehicle. During the loan term, if at any point in time you are unable to make payments then the lender has the right to sell your vehicle so that they can get back their money.
Although technically you don’t owe your vehicle as your V% is in their hand but it is your responsibility to make all the tax, insurance, MOT, and maintain your car so that it should be road legal and safe to drive.
Will my vehicle be repossessed if I miss payments?
Logbook lenders have the right to seize your vehicle if you don’t meet repayments. But most of the lenders don’t do so, but two or three consecutive missed payments may lead to reposed by the lenders.
As per law, they must send you a default notice first, giving you 14 days to make up for the missed payments. It’s a good decision to get free debt advice at that point; you can find what the options you have been.
FAQ:
Why are Logbook loans popular?
Ans: logbook loans include borrowing money secured against your vehicle. Logbook loans were very much effective for people who own poor credit scores. Besides, if you need instant cash for any emergency purpose, logbook loan providers may transfer cash to your account within an hour.
Can I get a logbook loan online?
Ans: Yes, you may be eligible to get a logbook book from a loan provider online. To apply for a logbook loan against your vehicle, you just need to provide the documents that you are the owner of that vehicle; and your bank passbook to acknowledge that you have a regular monthly income to repay the loan.
Can anyone get a logbook loan?
Ans: Yes, anyone who is above 18 years old; has a regular monthly income, and possesses a vehicle is eligible to get a loan against a vehicle. Even if the vehicle has an existing finance loan agreement, you might still be eligible to get the logbook loan. But consider there may be some terms and conditions.
What are the secured loans against a car?
Ans: a secured car loan is a type of financing in which the borrower has to place a security to the financial organization while taking the car loan. Most car loans are secured with a car or you can deposit a financial amount which may reduce the risk of the lender.
Conclusion:
As always in any situation, while you are borrowing money it should be your first duty to find a responsible, honest lender. You should also be confirmed that you can afford to pay back the amount within the specific period in a comfortable way. Late payments can lead to the loss of your vehicle.
Anyway if you are struggling with money, you can consult a financial adviser over the phone or online, who will be able to solve your financial problems.
