You have weighed other options and finally decided to go forward and acquire a logbook loan. Getting one on your own could be a bit difficult, especially if you lack proper guidance. Not to worry though. Below is a comprehensive guideline prepared exclusively just for you.
Get all your documents
First, it is important to make sure that your documents are in order. This is because you will be asked to submit your V5 document while you take the logbook loan. This is the document that is issued by the DVLA (Driver and Vehicle Licensing Authority) and it proves that you are the actual owner of the vehicle at that time.
After ensuring that your registration documents are in order, remember to make sure that your car is in a good condition. This is necessary if you intend on getting a good sum of money. A car in good condition will fetch you a better sum of the loan than one that is not.
After ensuring that all your documents are in order, verify that the lender is a member of a trade body that complies with the code of practice, specifically on logbook loans. This will come in handy by making the processing of the loan easier. It will also help give you a peace of mind knowing that you have not just handed out your car documents to a conman.
Be thorough and sign
Now that you have ensured the lender is legit and your documents are in order, you get down to signing the bill of the sale agreement. This is your third step. Take your time and read through all the elements in the document thoroughly. A good bill of sale needs to put into consideration some items. If they are missing or wrong, then the bill of sale will not hold any value. These items include:
- The schedule of items showing the goods of items that the bill is secured against should contain correct information. This includes the details of your car, such as registration number.
- The restatement of consideration must be the same figure as the amount of credit the lender gave you. There should be no mix up of the figure with the one stated in the consideration. The two should be the same.
- The statement of interest in the document needs to be clear, correct and set out as a simple percentage rate. The amount should be as you agreed. Note that this is not the same as the APR (Annual Percentage Rate)
- The repayment instalments should be stated accurately and in detail as agreed upon to be repaid in full.
- Finally and most importantly, there must be a witness to the bill of sale. This can either be an agent or employee of the company.
The fourth step, though optional, is to check for the registration of the bill of sale personally. This is optional because it is done in case you checked and noted that the lender is not registered but still needed the loan so urgently and decided to still proceed. If the lender is a member of the trade body, then he or she will definitely register the bill of sale in the high court within seven days of the agreement being made. If you follow up the registration and find out it is not done within seven days upon agreement, then the bill of sale is not valid. Additionally, it is good to note that in the case of the term of payment spills to five years and above, then the bill of sale must be re-registered to remain valid.
Lastly, it is advisable to repay your loan during the stipulated time, because failure to do so will lead to confiscation of your car by the lender. Since you are not the owner of the car, you cannot sell it as long as it is secured by the bill of sale. The signing of the bill of sale gives you the privilege of ownership till you are done paying the loan.