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Log Book Loans – Quick Loans for Bad Credit

In the United Kingdom some companies online or ones that have shops such as cash convertors offer what is knows as a log book loan. This type of finance could be a cheaper alternative to the no credit check finance of short term payday loans if you have bad credit and need quick cash loan for any emergency.

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Loan (Photo credit: Philip Taylor PT)

So with logbook loans the lender provides finance using what is called a ”bill of sale”which is not like a traditional hire agreement, but instead uses a legal means of securing his loan on the debtors (person borrowing the money) vehicle via the cars V5 logbook.. So let’s say you need to borrow £500 in an emergency, a log book company will only do so providing they value your vehicle at a value higher than the loan to cover themselves should you default on repayments. By law the loan company will be able to re-posses your vehicle without the need to go to court to do so. So always be sure you have regular income and can pay back and keep any borrowing to an absolute minimum if you can to avoid potentially loosing your vehicle should things go wrong financially.

You also do not need to be a homeowner to apply, council tenants, housing association residents of people staying with friends or family members can apply. Your credit status does not matter so discharged bankrupts or people who have lots of CCJs and defaults will be able to apply. The great thing about logbook loans is that they can be completed very quickly in less than quarter of an hour in some cases! All you need prove is your income by providing wage slips. If you have tried every other source this could be an option for quick cash with affordable repayments. This kind of borrowing is typically for a period of between 3 months to 36 months. The reason the loan term is usually not longer is because most companies will not lend more than 50% of the vehicle value as the value of your vehicle will usually reduce over time and the lender needs to fully cover the loan should you default during the repayment period.

For many people who have poor credit and have been refused a loan elsewhere this could be just another potential option. However a word of warning. some Logbook loan companies offer huge instant loans of up to £50,000 and you need to question yourself if you are over borrowing. Always keep to your minimum repayments and pay on time otherwise it could be a slippery slope into deeper debt. Shop around for the best rate, some companies even offers nothing to pay for sixty days & read the small print! Check online reviews of the company if you decide to use one. Only borrow if you have to; short term loans should be treated as such and not rolled over and over getting you deeper into debt. As with any borrowing, always look at the alternatives before committing to anything as you may find it cheaper to get an overdraft, borrow on a credit card, sell goods on an auction site, pawn goods in a local pawnbroker or see if a friend or family member can help you out.

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