What is a logbook loan? What are the eligibility criteria and benefits of such loans?
Logbook loans are those loans which are issued against your car mortgage. This is relatively a new form of loan in the market. A person with a bad credit can also go for this loan provided he or she must own a car. So, literally, you get a loan when you mortgage your car. Now, to get this loan, you must own the car and it must not be purchased against another loan. If you have taken a loan to buy it, then it should be completely paid or almost paid.
Now let's see what the eligibility criteria to get such loans are:
1. You must be 18 years old to apply for such loan. In some cases, the lenders want you to be 21 years of age.
2. You must legally own your car or any other vehicle.
3. There should not be any amount pending against a loan that you took to buy this car. At least, the payment must be almost done.
4. You must be a UK resident.
5. The issuing loan amount will be based on your car valuation. If your car is worth £1,500 then, your maximum granted loan amount will be £1,000. However, it will be at the discretion of the lenders and their valuation process.
6. Only cars or vehicles purchased in 2002 or later are eligible to avail such loans.
Now let’s see what the benefits of such loans are.
These loans are approved within a day as you are mortgaging your car. So not much hassle of paperwork.
There is no credit check involved in such loans. So, people with bad credit can easily get a loan too.
As the loan is pledged, the rate of interest is low and the repayment period is relatively long such as 5-7 years.
During the loan tenure the car will remain in your possession. However, you get the full custody of it once the payment is fully settled.
You can choose your repayment method. Depending on your financial capacity, you can opt for monthly or weekly payment.
So, it’s a good deal to get a logbook loan when you need cash. The primary criteria to apply for such loan are to have a logbook of your car which is also known as Vehicle Registration Certificate. The certificate contains all the information of your car.