Loans – either personal or secured are getting harder and harder to get in the recession-hit times that we are living in today. The facts that the real estate market is down in the dumps and pink slips are being given out galore, doesn’t help the situation. Further dip expected in property prices, has forced most secured lenders to limit the lending to about 70% LTV (Loan to value).
What makes matters worse is that the liquidity conditions too are quite rough in the current market, and raising sufficient capital to meet the loan demands is becoming more difficult even for personal lenders.
If you are one of those with a bad credit status, getting a loan is near impossible. Most Lenders will not even entertain you, and most lenders which earlier catered specifically to this section have shut shop or changed their clientele.
If you are a part of this section that is specially blacklisted in the loan market, then logbook loans are something you must know more about. Your short term fund needs could be covered by a log book loan, if you have a car that is free of finance.
These loans however should only be considered in dire emergencies and for seriously short-term money requirements as their interest rates at 400% are nothing to take lightly. This is the major drawback in these loans and hence the details and conditions should be thoroughly thought over before resorting to this option.
Many have taken these loans in a hurry, and ended up cursing the lenders and themselves.
Once you are sure that your fund requirement is desperate and short-term and not alternative seems available, you should look at the eligibility criteria set up by Logbook loans to ascertain whether you are eligible for one.
- You must be a resident of the UK, with minimum 3 years of address history
- The Car should not be more than 10 years old.
- The car must be finance-free and not pledged under a previous loan.
- The tax and insurance payments should be up to date.
- The MOT test must have been cleared by the car.
- The logbook must be in your own name.
- You must have verifiable proof of regular income.
Once the loan formalities are completed, a tracker will be placed on your car and the logbook submitted to the lender. Up to one month of payment holiday from the date of acquiring the loan is common but not advisable due to the steep interest rates.
The term of loan could be up to 2 years but once again the interest rates make it important to keep it to as short as possible.
On the bright side you can use your car even while you pay off the loan. The seriously high interest rates also almost always force the loan acquirers to hurry up the payment. The default rate in these loans however, is quite high, which justifies the steep rate of interest.