- Personal Finance
With the Christmas period now over, many people will be looking for a way to pay off their hefty credit card debts. Whilst there are numerous options available, sadly many will turn to payday borrowing which has interests rates in excess of 1,000% APR. However another, much more safer way to secure a loan is to go down the logbook loan route.
What is a logbook loan?
For those not in the know, a logbook loan is a way in which you secure a loan based on the logbook of your vehicle. That is the terms of the loan in the most literal sense, which would suggest that during the duration of the loan, you turn your vehicle over to the debtors.
In actual fact, it is a way in which you secure a loan against the value of your vehicle, but instead of handing it over you carry on using it as you would normally for your day to day business.
However, there are some caveats to using logbook loans. The first is that you must be the owner and the registered keeper of the vehicle. You can’t use a vehicle that is in the name of your partner, child etc. This is a precaution to limit others against credit fraud. Further, if you end up selling your vehicle whilst the loan is still ongoing, this loan will not transfer to the new owner, you need to pay back what you own to the loan company.
Also, as with any loan you’re not always guaranteed to get the sum of which you are seeking. Generally all logbook loans will offer a loan range of anywhere from £500 to £50,000 which is the industry standard when it comes to this kind of loan.
Further much like mortgages, various logbook loan companies will charge you extra if you end up repaying the money back quicker than initially expected. This in itself can turn out to be rather expensive and you’d have been better off going down a different route to secure a loan.
Things to look out for in a logbook loan company
Whenever you’re searching for a logbook company to secure a set financial sum, there is always the option to go for a company which doesn’t charge an early exit penalty fee, much like mortgages often charge for early repayments of the final balance. This is always something that you should choose to look for since it’ll end up saving you money in the long haul.
As with everything these days, you need to make sure that any company you deal with is credible and trustworthy. Just like you’d employ a plumber that was gas safe registered if you wanted your central heating fixed, when it comes to choosing any kind of company that you’re going to borrow money from you’ll want to make sure they’re safe to borrow from.
A key indicator that a company is in line with financial regulations is that fact that they’re part of the Financial Conduct Authority. Think of the FCA as a governing body of what financial institutions can and can’t do, much like the GMC when it comes to doctors.
Not all logbook lenders are the same
Sadly, there are many less than reputable online logbook loan companies out there that aren’t part of the FCA. However, one such company is elogbookloan. Not only are they part of the FCA, but they are also part of the Credit Consumer Trade Association. For any would be borrower, the fact that elogbookloan is a part of both bodies should give them peace of mind for their loan.
Further, unlike other vendors, elogbookloan does indeed allow you to pay back the balance of the loan early, and doesn’t charge you an early repayment penalty fees, nor do they charge any admin fees when setting up the loan. Of course, as with any loan in the event that you don’t repay on time then it can lead to more drastic money problems (as well as more money being owed), and in the case of a logbook loan it can also lead to repossession of the vehicle in conjuction with the aforementioned fees. With elogbookloan though, they do have a calculator directly on their site you can get an example of what you can borrow and how much you'll pay back. This is free to use under no obligation.
However, it is a great way to get credit if you’ve been previously been refused elsewhere, and /or you’ve previously defaulted on loans before and had County Court Judgements.