Logbook loans are actually a form of secured loans that can be got much faster than the conventional loans. Borrowers do not need to show houses as collateral, and cars can be used as security against the cash borrowed. If they fail to make their payments, the cars would be confiscated and sold off by the lenders. Many loan applicants in U.K prefer these loans because of the ease in arrangement of the collateral. A car’s logbook basically contains all the pertinent details of the car, which are VIN number, registration details, registered keeper’s information, etc. When you borrow the logbook loan, your logbook needs to be handed over to the concerned lender.

When all the borrowed money is repaid, the logbook is handed back to you. One prime advantage with these loans is that the cash is usually received within 24 hours of your application submission. Logbook is alternatively also called registration form-V5. Logbook loans should not be the first option of getting cash, as these are usually very expensive and cheaper ways of borrowing funds are available. People with poor credit scores find this loan option very appealing. The lenders are also comfortable lending out cash to them as the car is already received as a form of security. Credit checks are not conducted while applying for these loans and even if a person has CCJs against his name he can get a log book loan.

But the car which you put up as security should be in good shape and relatively new. Also, all financial agreements need to be duly fulfilled regarding the car and the tax and insurance should be fully paid. To give an estimate of how costly logbook loans UK are, an instance is cited. If a person had to borrow an amount of £1,500 through Logbook Loans over a period of 6.5 years, the total amount that he would require repaying would be £4,180.80. This is more than 2.5 times of the actual amount borrowed. That is equivalent to an APR of 437% (approximately). If a person wants to get monetary assistance through this mode of loans in U.K, certain conditions need to be met.

These are –

• The borrower must be an U.K. citizen.
• The person’s age must be 18 years or more.
• A logbook must be maintained in the borrower’s name.
• All the financial obligations pertinent to the car must have been cleared.
• The age of the concerned vehicle whose log book is pledged must not be greater than 8 years.
• The car / vehicle must be sufficiently insured and also taxed.
• The car’s registered owner must have a permanent income source.

The borrower needs to be cognizant of another important aspect too and that is the bill-of-sale. This is considered as the sole acknowledgeable document in the court. So, the borrower needs to ensure that the bill-of-sale is registered. The lender would need to approach the High Court for the repossession of the vehicle’s ownership rights if the bill-of-sale is unregistered.

Reasons For High Premiums

The main reason for young driver car insurance being so high is that they have no experience behind the wheel. Yes they will have passed their driving test, but as we know and as they will soon find out, the driving test does not prepare you for driving out on the open road. There is still a lot to be learned after they pass their test.

Another reason is their age, many young drivers still have a lot of growing up to do and many insurers penalise drivers that are younger than 21, we only get the best prices from insurers when we reach 25.

Another factor is the drivers gender, it is statistically proven that young female drivers are less likely to be involved in an accident than a young male driver. So for this reason females get better quotes for their insurance. Though in the UK and Europe a new law has just been passed meaning insurers cannot give better prices based on sex, it has been decided that it is discriminatory against males. The US insurance companies might take notice of this in the coming months.

The Learning Curve

Paying high insurance premiums is part of a learning curve for young drivers, if they have accidents or get any marks on their license, for speeding, running red lights and so on, their premiums are only going to get bigger and more unaffordable. Its teaches them a very valuable lesson, to take care, be responsible and be sensible. This is one of the most important things that a young driver needs to learn. If you drive safely you are going to protect yourself from harm and also those around you, if everyone thinks this way then our roads can only get safer. If you keep a clean license the price of your insurance will come down each time you renew it.

The Right Car

Another important factor in getting cheap young driver car insurance is choosing the right car to drive. As much as most young drivers want to have the sportiest car on the market they need to learn that being able to drive such cars is a privilege that they have got to earn over the years. So buying a base model car with a smaller capacity engine is going to cost far less to insurance than a sporty GTI or convertible. Then as the years of trouble free driving with these cars adds up you gain the trust of the insurance companies and they give you better prices for insuring these more flashy cars.

Specialist Insurers

These days there are actually quite a lot of specialist insurers out there for young drivers, though recommending one is not easy. The company that gives the cheapest premium to me might not be the same company that can give you the best premium. As mentioned above there are a lot of factors that are taken into consideration, the drivers age, sex, where they live, the car they drive, any accidents or convictions and also the coverage needed. As much as it is a tedious task the best thing to do is just go through all the insurers and get quotes from them all. Thankfully most insurers have websites that give you quotes, so you don’t have to spend a load of time and money on the phone to different people.

When you apply for car title loans the lender will check over your car or truck and give it a value. This value dictates the amount of loan that they give you. Generally they will lend you between 20% and 50% of the value of the car. They will also take into account your credit history, the better your credit rating, the higher the loan you get will be. Lenders will only give out this small percentage to the borrower so that they have a better chance of recouping their money if the loan is not repaid.

Title loans really should be the very last resort, because of the huge interest rates there is a chance that the loan will never be paid back, or if it does it will take many years. On average the APR on these loans can be about 300% and it can go as high as 500%. Plus there are also so many fees and hidden fees that they will charge you, like processing fees, origination fees, as well as fee for installing a kill start switch in your vehicle and any other fees that they are able to charge you that are within the law.

The lenders install the kill switch into the vehicle so that if you miss any payments they are able to stop you using your car or truck. This means if you are at the shops, at work or even in the middle of nowhere you will not be able to use your car. Some lenders will give you a grace period of a day or two just in case there is something wrong with your bank and they haven’t made the payment for some reason, but there are some that won’t give you this grace period, and leave you stranded right away. Not only could you be stranded in the middle of nowhere you it could leave you unable to get to your work, meaning you have no more income and making your situation even worse. This is why auto title loans should be avoided at all costs.

If for some reason you are unable to make any repayments this will result in you paying even more fees, in some cases it can lead to dates in court, after you have paid these late fees and court fees you could end up paying a lot more than the loan is actually worth. Added to that the lender can seize your car and sell it on for its full value and keep all of the profit they make. So not only do you lose your car, you are also heavily out of pocket because of all the extra fees. Many companies can get away with this because of slack regulations regarding title loans in many states.

If you manage to get yourself a decent lender then they may let you skip some payments if you have a good reason for doing so, though you will have to make the arrangements for such a thing well in advance. Again you can incur even more fees, called “roll-over fees”, plus a late payment fee. Some lenders will also make you pay off the interest for that months loan and let you away with not paying back the loan itself. This again is not ideal, you pay more fees, the loan costs you more money and it also takes you longer to pay the loan back.

I hope after reading this that you realise that car title loans are to be avoided at all costs. Especially if you are currently in financial trouble as you will end up even worse off after you have taken the loan out. Even if you are desperate for emergency money you should be avoiding these loans. There are so may more loan options out there that you can take advantage of, no matter what your credit rating is like there will be a better option for you. Plus you can keep your car, make it into work and hopefully, over time get out of you financial strife.

If, for whatever reason, you decide you want to take out one of these loans, online title loans are the best ones to look at – even the best aren’t that great – there are many lenders for you to compare and hopefully you will be able to pick out the best of the bunch.

Look At Your Situation

Before you even think about going out to get yourself a loan you really need to have a good look at your finances. Lenders love to see a nice clean credit history before they start dishing out loans and also steady employment over several months. So if you have just come out of college or school and are looking to get a loan, then it would be a wise idea to give it six months to a year of stable employment before lenders will see you as being suitable for a loan.

You also need to have a good look at your budget, you need to work out exactly how much you have left over to pay for a loan after you have paid for everything else, your mortgage, food and utility bills and so on. You will also want to have a look at your credit score, all lenders have a look at this when they are considering you for a loan. If you have a credit score of less than 680 then the chances of you getting a loan from a regular lender is going to be pretty slim to none existent. You really want you credit score to be as good as possible, the lenders use this score to work out your interest, so the higher your score the lower the interest rate you pay. Before you start applying for loans you should ideally pay off all of your other debt. Its not possible to get instant car credit, it does take a bit of time an effort.

Shop Around

A lot of people go into the dealership and find a car they like then just take the first finance offer that the dealer makes them, which almost always turns out to be a poor deal and the buyer spends a whole load more than they actually need to. Dealers generally charge huge interest rates and take advantage of people who are either clueless, or desperate for a new car.. Before you go to the dealership you should do some research on the internet, there are a load of sites which allow you to compare all of the different loans that are currently available. Use your credit score that you found out earlier to work out the interest rates that you are going to be charged, then go back to the dealership with all of your new found knowledge and you will be in a much better place to decide if the deal they offer is good, and if it isn’t you have power to haggle.

If you can get finance outside of the dealership then you really shouldn’t need to consider the finance that they offer. If you have a loan from an outside company it puts you in a much better position to haggle on the price of the car, obviously saving you more money.

Other Places To Get Credit

There are of course many other places to get loans away from car dealers. If you search online there are an infinite number of sites that will compare pretty much every loan site there is. You should also be able to find a loan that has good terms and also lower fees. If you have bad credit then there are plenty of companies that will be able to accommodate your situation, and there are also lenders that will deal with you even if you have been declined for loans elsewhere. It really does pay to shop around, try to get as many quotes as you can, to see all of the options before you make a choice.

You could also try credit unions, they are good option if you are looking for good rates, they are also, generally better with you if you have bad credit. You could speak to your employer to find out if they have their own credit union. A credit unions fees are also generally a lot lower too.

It can be pretty hard to get loans these days, so you need to be careful with all your finances and you need to know about all of your available options, if you have a lot of knowledge about the loans available you stand a better chance of getting a better loan. And if you have bad credit it doesn’t automatically mean that you are unable to get car credit loans, because there are so many different places to apply there is always someone who will accept people in your circumstances.

The V5 form contains all of your vehicles details, such as the identification marks, for example the registration number, VIN, chassis and engine numbers, as well as all of the details regarding the owner. When you take out a logbook loan, you borrow the money against the value of your vehicle, the lending company keeps a hold of the logbook until the loan is paid off. If the loan doesn’t get paid off the company can then claim ownership of the vehicle.

So Who Can Qualify For Logbook Loans UK?

People who have bad credit, arrears, defaults, late payments and bankruptcy can all apply for logbook loans. You can apply for a logbook loan at many banks as well as at many other independent lenders. Or you can even apply for your logbook loan at many place online, for faster payments. So basically any car owner can get themselves logbook loan simply by handing over your car registration details.

These loans are often viewed as being a viable solution for people who are going through desperate times, for example people who are in extreme financial difficulty and have so far been turned down by all of the other lenders because of their bad credit. But not everyone will agree with the way that the logbook loan lenders work. There have been many complaints from organisations in the UK and other groups that have tried to take steps to ban logbook loans. The idea of giving up your car and handing over the V5 registration to the lender, who will in effect be the owner of the vehicle for the time being, until the debt is paid, has been deemed unethical. More often than not the interest rates are extremely high, with some lenders taking in excess of 600% A.P.R

If you or the person taking out the loan fails to pay the debt back on time, then the lender then has the ability to claim the car as their own without any need for a court order. Another issue is that has been argued that it will encourage people already deep in debt to get further into the red.

The issues that make up the argument for banning this lending practice are that there is no protection for borrowers that fall deep into debt, the unfair collection practices, the jargon packed, confusing language used in the agreements, and the astronomical costs of these loans.

Is a logbook loan for you if you are in debt? I would strongly suggest that it wasn’t, but the final decision will obviously come down to you.