What is the Difference between Logbook Loan and A Payday Loan?
The Logbook loan should not be confused with a payday loan. Both types of loans are generally very accessible as long as the borrower accepts the lenders lending criteria before borrowing their money. The benefits of using a payday loan and a logbook loan is that they both provide an instant decision and you can receive the money on the same day with very little fuss.
A logbook loan is a totally different type of loan to a payday loan. A payday loan is a short term unsecured loan that allows the borrower to borrow money up to £750 at any one time and the money borrowed needs to be paid back in full with interest before the next pay day.
A Logbook Loan Is Similar To A Secured Homeowner Loan
The logbook loan works in a similar way to a secured homeowner loan which is based on a property that is owned by the person borrowing the money. The property or the home will then be held as security by the lender if the loan is not repaid or the borrower defaults on the repayment arrangements. The borrower could lose their home if they do not keep up their agreed repayments.
In the case of a logbook loan the money borrowed is secured on the borrowers motor car logbook or the vehicle registration document. With a logbook loan you are able to borrow larger amounts of money up to £50,000 as long as your car is worth that amount of money. The lender will normally spread the repayments over longer repayment term as long as the payments can be met.
How To Qualify For A LogBook Loan
In order to qualify for a logbook loan the borrower will need to be over eighteen years old and be a resident in either EnglandorWales. The motor vehicle being used for a logbook loan must have no outstanding finance, and the borrower needs to be able to afford the monthly repayments. A logbook loan is not dependent on the borrower having an A1 credit history as there are no credit checks required by the lender as part of the application process.
The logbook loan application process is in two parts, the first stage starts with either a telephone call or by completing an online application form. After the lender has received the application form, they will contact you to arrange an inspection of your motor car and to see the cars logbook. At this inspection they will value your car in order to determine how much you can borrow. They will make you an offer and calculate your monthly repayments. If you wish to proceed with their offer then they will need to see some proof of your monthly income. In order to complete the finance arrangement the logbook loan company will require you to and sign their agreement forms and for you to leave your logbook with them. Once all the paperwork is completed they provide you with the money in the way of a cheque
Benefits and Pitfalls Of A Logbook Loan
To summaries the benefits of a logbook loan, there are no credit check required to see if you are in a debt crisis, your credit history is irrelevant, self-employed people are accepted, up to £50,000 can be borrowed and the repayment terms can be spread over a longer period. The pitfalls to watch out for are your car can be sold if you do not keep up your monthly logbook loan repayments at all times and your vehicle must be free of any finance and you do need to be the owner of the car and have a valid vehicle logbook
If you are considering applying for a logbook loan or payday loan you should tread with caution and only consider this option if all the other avenues are closed. As a borrower you should make sure that you fully understand the amount of money you are borrowing, the interest rate being charged as well as the total amount of money to be repaid by you. It is important that anyone borrowing money from either a logbook loan or a payday loan company should always read the terms and conditions and if you are not sure then take advice first before proceeding.
Leave your thoughts and comments about any experiences you have had with a payday loan or a logbook loan below.