With times being tough at the moment many people in the UK are looking to pick up credit from whatever source possible. The high street banks are tightening up their requirements for giving out loans so less conventional credit products such as log book loans are gaining in popularity.

If you find yourself in a crippling financial situation then your choices for getting access to cash may be few and far between leaving you forced to turn to lenders who aren't going to give you a good deal.

Your choices, if you want fast credit and can't get the banks to entertain you, are usually between the likes of pawnbrokers, payday loans lenders and loan sharks. A newer entrant to the market is know as the log book loan and its gaining in popularity in these tough times but what is it and are they a good choice when compared to the other loans available.

The concept of a log book loan is pretty simple, you put up your car as collateral for a loan and the lender gives you a big wad of cash for you to do whatever you wish. Sounds like an ideal situation if you a desperate for money but there are some serious downsides to this as we will see later. For the moment we'll look at the advantages of using Loans, which are:

1. You get to apply for the cash you need online using a simple application process. If you have Internet access it really is a good way to get the money you need.

2. You can borrow between £500 and £50000 - That's some serious cash you can get your hands on although obviously the limit to how much the lender will be willing to hand over will depend on the value of your car. Since you use your vehicle as collateral in this secured loan you can expect the lender to want the car to be worth more than the loan.

3. Receive your cash in 24 hours - Not something you would expect from a high street bank but if you have ever used a payday loan then you know the advantages of having a lender who can get your cash to you in under 24 hours. Just like with Payday Loans, if you are in a difficult financial situation then you really can't beat the speed of the Log Book Loan.

4. No credit checks are carried out to examine your credit history - Many people these days have come into credit difficulties as some point in their lives and this is reflected in there credit rating which can result in it being far more difficult to get a loan from any of the conventional sources. The beauty of the LogBook Loan UK is that the lender won't check your history at any point in the process so you don't have to worry about your financial past.

Application for a log book loan is open to anyone in the UK who is the legal owner of their own car as long as that car is clear of finance. As already mentioned you don't have to worry about the traditional barriers to taking out a loan with a high street bank as the loan will be secured against your vehicle.

Taking out a log book loan can seem like the answer to all your worries if you are a car owner and in need of fast cash. They are easy to apply for, quickly available and lenders ignore your bad credit rating, what could be more perfect?

However the reality of log book loans is somewhat different from the image painted by the lenders who tout this product. Log book loans lenders will always have the interest rates payable on these loans listed on their website but of course they will say nothing about them and hope that you skim over them without realising what they really mean for your financial welfare.

When you actually sit down and examine the interest rates that are applied to these loans you will be gobsmacked at the implications. For example if you take out a £1500 loan with one of these companies over a period of a year and a half you will find yourself paying back over £50 per week, every week until the loan is cleared. What this means in real terms is that you will end up paying back the lender nearly £4200 for your £1500 loan. Does taking out a Log Book Loan still sound like a good idea?

These figures mean that you're taking out a loan with an APR of well over 400%, that some serious interest people and means you'll be paying back nearly 3 times the original amount.

Making log book loans illegal might be taking things too far but there is no doubt that it is in almost no ones interest to be using this sort of product under any circumstances. If you find yourself in a situation where you are considering using one of these products then I urge you to reconsider and try finding a better way of solving your monetary problems. If you only really need a small amount of cash it would even be more preferable to get an online payday loan than to play Russian Roulette with a Log Book Loan.