subject: Use your car to cruise you through hard times [print this page] As the fact is not hidden, the economically crunched scenario of UK has written a new tale in the history of this country. Where thousands of them had faced its heat, a few more are still under its scanner. The borrowers in the country were not being able to pay back the loan amount, and eventually more defaulters floated up then before during recession. But then lending organisations came up with something which could keep their credit product secure, even in the case of defaults and to provide the customer with low interest loans.
Eventually, logbook loans were developed. Secured against the market value of your car, log book loans have emerged as a new way of lending, bearing minimum risk to lenders and low interest rates to borrowers. By securing loan against car, UK people are helping and saving themselves with all those sky-high APRs applicable on credit card and unsecured loans.
A logbook is basically a vehicle's legal document, owed by the owner (in this case a borrower) which carries borrower's name, VIN number, engine number along with current registration mark and other vehicle and user specific details. As majority of the population in UK is middle class and most of them owes a car, lending organisations finds another alternative to secured loan.
When an individual is pledging his/her car as collateral to the lending entity, he is making sure that default in this may result in losing his car in a jiffy. The obvious meaning of keeping your car as collateral is to reduce the risk to lenders, for which they offer nominal interest rate on the loan amount you bag.
The process
Not all but plenty of the established lenders provide logbook loans. Before applying for loan against car, UK people should be aware of the fact that they won't be pocketing the current market value of their movable asset. They are eligible to bag only up to 50% of the current value of their asset (in this case, a car) staked as collateral. A borrower then signs a credit agreement along with a bill of sale, transferring the ownership of the car to the lender. It is this document which a lender can use in future to permanently take the possession of the car, in case of default.
Other documents like MOT certificate, insurance certificate and the V5 registration are also pledged along with others which flaunts full information about the owner of the car. Before applying for this loan, an individual should be thorough sure about what he/she is doing as it could cost him/her the asset they pledged as collateral.
One of the best part of this loan is that the lending institution do not demand any credit check before approving it. Apparently, a person with bad credit history are also eligible to apply for this loan. Though there are some point to keep in mind before applying for this loan, like:
The logbook that is to be pledged should be in the name of the borrower.
The borrower should be employed and should have a regular income.
The vehicle should not be more than 8 years old.
The vehicle should bear an insurance certificate.
the vehicle should not hold any due payments or finances.
That's it. If you meet all the conditions that are mentioned above, then congrats, even you are eligible to bag loan against car. UK people should go for this loan because the option of fighting back is more appropriate than struggling hard.
