Tips When Choosing A Pre-owned Vehicle
A new report has been investigating claims that some car owners are taking out loans secured against their cars and then selling them before settling their accounts, leaving the next buyers with the outstanding debts. For this reason, Trading Standards are demanding for logbook loans to be banned.
So, what are logbook loans and how do they work?
What Are Logbook Loans?
Logbook loans are a quick and easy way to take out a loan. You are able to take out larger loans with a lower interest costs since they are secured against your car or other vehicle. How much you may borrow all depends on the worth of your vehicle. For example – if your vehicle is worth around 3,000 GBP, you would probably be able to borrow around 2,000 pounds. It’s normally around 75% of the worth of your vehicle, but it really comes down to the loan provider that you go with.
A feature that is characteristic of these loans is the lender will keep hold of the cars’ logbook until the borrowed amount is paid back.
Why Do Men and Women Take Out Logbook Loans?
. They are an option for those who have unfavorable credit ratings.
. Using a vehicle as a guarantee, ensures that you may borrow significantly more than would be possible with a payday loan.
. Depending upon the time of application, a logbook loan will most likely be approved and payment will be received on the same day.
. As your car is used as security of your loan, your interest will be a lot lower than that of other short-term loans such as cash advance loans. The interest is around 10% a month compared to around 25% for a regular payday loan.
As with any kind of loan, there are good and bad things to consider and there will always be risks. It is never a good idea to borrow any money if you don’t think that you’ll be able to pay it back.
How To Avoid Getting Caught Out When Purchasing An Used Car
. Make sure that you don’t purchase any vehicle without its logbook. As logbooks are taken as a guarantee for the loans, if your vehicle doesn’t have one, it could imply that not only is there owing money on the vehicle, it technically doesn’t belong to you as the loans company will have your V5 registration papers.
. Another strategy to ensure your car is up to standard, is to get an entire vehicle check. In addition to any unresolved finance or loans taken out on your car, it will check if it had been stolen in the past, been written off, had any mileage troubles or had any plate transfers etc.
So, who knows what the future holds for logbook loans, but for the time being, make sure that you are meticulous when purchasing an used car, and if it does not have its logbook, it would probably be advisable to not proceed with the purchase.
A top name in the emergency loans sector, Log Book UK Loans offers fast and easy cash loans that are secured against your car or other vehicle, for those who need it most throughout the UK.
For extra info on Logbook Loans, visit logbook loans to find a branch near you.
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