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Logbook loans are extremely popular in the UK especially among borrowers with bad credit. It comes with the promise of quick cash, which for most people, is an irresistible chief advantage. If you’re one of the many borrowers thinking of resorting to this type of loan to meet a financial emergency, here’s a quick guide to help you understand what you are getting into.

Logbook loans overview

Logbook loans are secured personal loans specifically offered for people with poor credit ratings. Whether you have a bad credit score because of defaults or ccjs, this is the type of loan you should be applying for. There is no credit checks needed, which mean faster loan approval no matter your credit rating.

With logbook loans, the loan is secured against your vehicle. You can avail larger loan offers typically between £500 and £25,000. Some lenders even offer loans as much as £50,000. You just need to meet the eligibility criteria to get approved fast.

Eligibility criteria

To be eligible to apply for a logbook loan, there are a few requirements you must meet. For one, you must be of legal age. Two, you must live in the UK and three, you must own a vehicle free of financing. If you meet the basic requirements, you’ll be ask to provide the following documents:

Applying for the loan

To apply for a loan, you can simply go online and look for trusted and leading lenders with a solid track record. You can complete the initial application process online. Just fill out the form and wait for further instructions. If you are deemed eligible for the loan, your lender will ask you to proceed to the nearest branch to submit your requirements. In some cases, representatives are sent out to your address so you can complete the application process.

Getting the loan

As soon as your loan application is approved, you’ll be paid by cheque. You will need to wait a few days for the cheque to clear. If you really need the money and you can’t wait a few days, you can request for a quick cash service, which may cost you up to 4% in charge fees.

Paying the loan

Logbook loans in general have repayment terms from 12 up to 36 months. Payments can be done weekly, bi-weekly or monthly. You can do it through an over-the-counter transaction at any accredited payment centers or you can set-up a direct debit arrangement with your bank. Different lenders have different repayment terms. It’s best to read the fine print or ask your lender directly to better understand the repayment arrangement.

If you can’t repay your loan back…

In the event that you can’t repay your loan back, your vehicle may be seized or repossessed. As agreed upon on the loan terms, you’ve secured the loan on your vehicle. This means that your lender has the right to employ bailiffs to repossess your vehicle after the grace period to update your payments has passed.