The concept of logbook loans was a game changer not only in the UK but also in other parts of the globe. The introduction of logbook loans made it possible for individuals with a poor credit score to finally apply for a loan without anticipating rejection. All a person needed was a car in good condition to be used as collateral. In other words, logbook loans are secured using a person’s car. A borrower basically signs over their car logbook to the lender for the entire period of the loan. In other words, while you continue to drive your car and even use it generate some form of income, you don’t own it during the duration of the loan.
The ownership of the car reverts to you once you clear the outstanding amount. If you are the kind of person that has from time immemorial been a victim of incessant rejections because of your credit score, you need not worry as v5 loans are the perfect remedy. However, before you can be considered for a logbook loan, you need to be a bonafide citizen of the United Kingdom, be a person of legal age (18 years and above), be a person of sound mind, own a car that you are willing to set up as collateral and you will be good to go.
You also need to show proof that you regularly get an income whether you are in full time employment, part time employment or in self-employment. Copy of bank statements as well as payslips should be enough to show proof. Basically, logbook loans applications are processed within a very short period of time (usually 24 hours or less). It is highly advisable that you make prudent financial decisions and only borrow what you need. The fact that your car can avail you a substantial amount of money could make you apply for more than you actually need. The repayment for the same might be tough and hence making you drown deeper into debt.
In as much as the prospect of applying and getting for a v5 loan irrespective of your credit score status is attractive, you need not forget that there are risks. First and foremost, you risk losing possession of your car should you be unable to service your loan. Secondly, defaults could actually further negatively affect your credit score which simply means that your chances of getting approved for a loan facility in future will become slim. Are you interested in learning more about logbook loans? If yes, why not look here?