What are the Requirements for a Logbook Loan?

If there is any business really thriving these days, then it has to be loaning money. Whether you are seeking out a short-term loan to pay some bills quickly, or you need the money for a more long-term problem, there is most likely a lender or a bank a street away from your home.

Speaking of short-term loans, one type of them has been especially popular in United Kingdom in the recent few years and that is the logbook loan. These loans are of the secured type, being attached to your car's logbook document. A lot of people mistakenly think that the car itself is used as a collateral, but that is not true. You can still use your vehicle as before, but while the loan is in effect, the said document stays with the lender.

Of course, the logbook document is very important, as it contains all the valuable information about your vehicle, such as the registration number, engine number, VIN number, as well as important information about the registered owner of the vehicle. Without it, you can't sell the car, so in effect, the lending company is now the legal owner of it, and it can take it away from you if you have defaulted on payments.

In order to be approved for a logbook loan you have to be:

  • 18 or more years old
  • Resident of UK
  • Employed
  • Using a bank account
  • A registered owner of a car

The car shouldn't be more than 8-10 years old and it should be in good condition. It doesn't have to be a brand new and powerful machine, but it shouldn't be a piece of junk either. Also, be sure that the car is free of any loans and that you regularly pay taxes on it.

Probably the best thing about logbook loans is that nearly anyone can get them (provided they fulfil the requirements above). This means that, even those who would otherwise be rejected for a loan at a bank or with other types of lenders, on account of his or hers credit score, is now given the opportunity to apply for a very good loan and get some much needed cash on the bank account. The loan can be available within a few hours since application and, what's more, the owner of the vehicle gets to keep it and use it as before.