subject: Compare Logbook Loans And Be A Knowledgeable Consumer [print this page] Compare logbook loans carefully before you turn over your vehicle's logbook to the lender. For those unfamiliar with the term, a logbook loan is basically a secured loan. The borrower is not really being extended a line of credit, since the lender will take possession of the car's logbook making it impossible for the borrower to sell the car. People generally apply for a logbook loan because they are unable to get credit due to a poor credit history.
The term logbook is mostly unknown in the Untied States of America. Logbook originally referred to a ship's log where the time and distance traveled by the ship would be logged into a book. As often happens, the meaning of logbook has been expanded to include reference to a vehicle's registration certificate. A car owner will only gain possession of the vehicle's logbook when he has fully paid for the car and there is no financing or other lien attached.
A vehicle's registration certificate in the United Kingdom, Ireland and Australia is known as a logbook. The person seeking the loan surrenders the logbook to the lender in exchange for an agreed upon amount of money, a loan to be repaid with interest. The vehicle must be free of liens and wholly owned by the borrower. Since the borrower is no longer in possession of the logbook which proves ownership, he is restricted from selling the vehicle. Thus the lender is provided with security that if the borrower should default, the lender can take possession of the vehicle.
A consumer shopping for a logbook loan has many options, two of these options are Mobile Money and V5 Loans. Mobile Money only has locations in the United Kingdom, while V5 Loans has several branches in England, Scotland, Northern Ireland and Wales. Due to residency requirements, where the borrower resides will affect the sources of potential lenders.
The interest rate charged is a point of consideration. Mobile Money's rate is slightly higher than V5 Loans' rate, 385.2 percent versus 378.3 percent. The two competitors also differ in the duration of time to repay the loan. Mobile Money has a maximum loan life of six months compared to the V5 Loan maximum of twelve months. Borrowers will need to weigh the cost of the additional interest paid against their ability to repay the loan in the time allotted.
The person applying for a logbook loan will likely have a temporary cash flow problem. Coupled with an inability to get credit and an immediate need for cash is what creates the financial need. Hopefully, the impetus for acquiring the loan is of a temporary nature. If the cause in ongoing, the borrower may be unable to repay the loan.
V5 Loans will lend up to seventy-five percent of the car's value. The competitor's Website does not clearly state the percentage value of the vehicle that it will loan. This may depend on the mileage, the condition and the age of the car. Based on the value of the vehicle, the maximum amount that both companies will loan is 25,000 pounds. There are other lenders with a higher maximum, but the interest charged is also greater.
The expediency of logbook loans is what makes them attractive to consumers. If someone is considering this type of loan, it is prudent to compare logbook loans and review the terms of several lenders. It is certain that the borrower will pay considerable interest, but borrowers should definitely compare lenders to get the best loan available under the circumstances.
by: Brian B Smith
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