Tag Archive: logbook loan

Pros And Cons Of Logbook Loans

Just like any other loan option, logbooks has its advantages and disadvantages that may imperatively assist you in the decision of whether or not to take a logbook loan. Knowing more about a service or product goes a long way in helping you make up your mind. Save yourself the trouble of searching the web for insurance information. Here is a well-researched summary of the pros and cons of these logbook loans.

Advantages

Easy Processing

Firstly, it is easy to process a logbook loan. All you need is your V5 document and to also sign a bill of sale. This is not in any way involving like other mainstream lenders, where you may be required to fill a lot of documents for your loan to be processed. It is quite an easy and fast procedure with limited paperwork.

Quick Cash

Additionally, logbook loans will take you only one day to get the amount of cash borrowed. In fact, it may be given to you immediately you are done signing the bill of sale. In the case of other lenders, such as banks, processing a loan is a process that may take even weeks, sometimes months, to materialize. Furthermore, there is a high chance that you may end up not getting the loan in the long run.

No credit check!

Another great advantage with logbook loans is the fact that there’s no credit check involved. If you’re struggling to get approved for a personal loan because of bad credit, applying for a logbook loan is one option you might want to consider. Whether you have a bad credit score because of missed payments or defaults, it doesn’t really matter. As long as you have a vehicle you can use as collateral, avail a logbook indicating that the vehicle is yours.

Impeccable flexibility

Lastly, the amount to borrow is dependent on the condition of your car, hence borrowing large loans is possible and can be repaid from 12 months up to 36 months. You can borrow up to half the net worth of your car and up to 70% in some cases. Therefore, the amount of money is usually very high.

Disadvantages

You may lose your car

One of the disadvantages of a logbook loan is that you may lose your car in case you fail to repay your loan in time. This will be a great loss on your part. Considering the fact that most loans are half the net worth of your car, losing your vehicle could be unbearable. You can learn more about the logbook loan risks on this post.

Not so economical at times

The second disadvantage is that logbook loans have got higher interest rates compared to loans from other financial institutions such as banks and SACCOS. Such loans from make repayment easy and manageable. But as for logbook loans, you might struggle a bit while making the repayments because the Annual Percentage Rate is usually very high.

Not so easy to track

Moreover, it may not be easy to keep track of the amount you owe, particularly if the lender doesn’t take direct debit for the weekly payments. So, if you are not keen, you may end up paying twice or more in a week. However, if you find yourself in a position whereby you are not sure of how much you have paid back, simply inform the lender and they’ll give you a statement of the debt you’ve got.

 

Common Logbook Loan Questions

What about employment?

Employment is not a key factor when it comes to getting a logbook loan. The fact of whether you are employed or not narrows down to one question; Are you in a position to repay back your loan?

Will I have the money the same day?

This is a bother to many who seek to take up logbook loans. It will help you to know that most loans are processed fast and the time taken in order for you to get your money is not that long. You will, however, get your money on the same day you applied.

Is there a reason recurred?

To most lenders, you do not need to explain to them how you are going to use the money. The important thing is that you are able to repay them back in the stipulated time frame.

Do I have confidentiality?

In matters concerning confidentiality, there is no need to worry, the only instance where you will be required to involve another person is if the lender sees fit. And by so doing they must inform you first before they do so.

What if I am self-employed?

Self-employment is not an issue while acquiring a logbook loan as long as you show you can afford to pay the lenders back the money you borrow.

What happens if I struggle to make payments?

It is advised that if you are struggling to pay back your loan you contact your lender and try to sort things out. This goes a long way to building your trust and the lender will give you additional time to pay the loan back. Contacting the lender is crucial but in the event of you defaulting, and there is no indication of you paying the loan, then your car will be confiscated.

Can I repay early?

Yes, indeed you can repay your logbook loan early. In fact, why wait until the last minute to repay if you are in a position to repay early? Save yourself the trouble of all the hustle with your loan provider by paying them weekly and it will reduce the total no generally.

Can I borrow a lot of cash?

The sad news here is that you can only borrow half the net worth of your car and in some few cases probably three-quarter the price of your vehicle. But this compared to other loan lenders is quite a large amount of money.

How safe is my logbook

The safe keeping of your log book is dependent on the lender and most make sure it is well kept. They must keep it safe for if they lose it you have the right to take them to court. Always remember to focus more on repaying the loan and by the end, you will have your V5 document back.

How to Go About Acquiring a Logbook Loan

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.

Always Verify

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.

Always Recheck

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.