June 24, 2008
What is a logbook loan?
With the economy in freefall and the credit crunch continuing to have an effect on family budgets , people are beginning to seek out alternative routes of raising finance. Some people are even committing themselves to loans that have exorbitant interest rates. One of the newest types of loan product is known as a ‘logbook loan’.
Logbook loans are those loans that require people to use their vehicles as security. The firms that deal with this type of loan will normally lend you a percentage of your vehicle’s actual trade cost. The company will ask you to surrender your V5 registration, insurance and MOT documents. You will also be required to enter into an agreement that will give the company ownership of your vehicle if you default on your repayments.
If you do fail to keep to your repayment terms then your vehicle will be repossessed and sold at auction and you will be asked to pay any outstanding monies if the sale does not meet the loan value. You should also be warned that these loans are extremely expensive and APR’s can rise to as much as 430%