Top 30 Reasons to Take Out a Logbook Loan and Why It’s a Smart Choice
02.10.2024 by Paul H
Top 30 Reasons to Take Out a Logbook Loan and Why It’s a Smart Choice
Logbook loans are becoming increasingly popular due to their flexibility, accessibility, and quick approval process. Below, we’ll explore 30 reasons why a borrower might opt for a logbook loan over traditional financing, with real-world examples to help illustrate how these loans can be beneficial.
Logbook loans provide rapid access to funds, often within 1hour of application. This makes them ideal for handling emergencies. For example, Sarah, a single mother, used a logbook loan to cover the cost of urgent plumbing repairs when her heating system broke down during a cold snap.
2. Poor Credit Check Accepted
Logbook loans don’t rely just on credit scores, meaning individuals with poor or no credit can still qualify, they look at bank statements and review income and expenditure to ensure the loan is affordable and suitable. John, who had a bad credit history, needed funds to cover medical bills for his child. A traditional loan wasn't an option due to his low credit score, but he was able to secure a logbook loan using his car as collateral.
3. Minimal Paperwork
Traditional loans often require extensive documentation, but logbook loans come with minimal paperwork, making the process much quicker. Emma, a freelance graphic designer, didn’t have time to gather payslips and financial statements for a personal loan but needed money to upgrade her work equipment. She open banking to submit her bank statements and received a logbook loan and had the funds within 48 hours.
4. Keep Driving Your Vehicle
Even though your vehicle is used as collateral, you can continue using it while repaying the loan. For example, Mike, a delivery driver, used his van to secure a loan to cover his child’s school fees, and he continued working without interruption.
5. No Need for a Guarantor
Unlike other loan types that require a guarantor, logbook loans don’t have this requirement. Claire, who didn’t have anyone to act as a guarantor, needed funds for a last-minute wedding expense. She secured a logbook loan using her car and didn’t need to involve family or friends.
6. Flexible Repayment Terms
Logbook loans typically offer flexible repayment plans, allowing borrowers to choose terms that suit their financial situation. Tom, a small business owner, used a logbook loan to buy equipment and chose a repayment plan that worked with his variable income stream.
7. Loan Amount Based on Vehicle Value
The amount you can borrow is tied to the value of your vehicle. Jane, who owned a relatively new SUV, was able to secure a large enough loan to pay for unexpected home renovations after a roof leak, something a personal loan may not have offered based solely on her credit.
8. Bad Credit, No Problem
Logbook loans are an excellent option for those with poor credit. Alex had been turned down for a personal loan because of his credit history but needed money for his daughter’s tuition. His car’s value allowed him to get a logbook loan, offering him a solution that traditional loans couldn’t.
9. No Homeownership Required
Unlike home equity loans, you don’t need to own a property to qualify for a logbook loan. Jessica, a tenant, needed a loan to help her launch a side business but didn’t own a home to use as collateral. She secured a loan based on her car’s value and used the funds to buy equipment for her new venture.
10. Self-employed? No Problem
Logbook loans are accessible for freelancers and self-employed individuals who may not have steady income. Mark, a self-employed photographer, needed a loan to upgrade his camera gear but didn’t have regular income proof to secure a bank loan. His car allowed him to get a logbook loan quickly.
11. Vehicle Ownership Maintained
You retain full ownership of your vehicle throughout the loan period, allowing for flexibility in future financial decisions. Lisa, who was planning on selling her car in the next year, took out a logbook loan to pay for her son’s university costs while still retaining ownership of the vehicle.
12. Online Application
Most logbook loan providers offer an easy online application process. Andrew, who needed funds to cover car repairs, applied online, avoiding the hassle of visiting a bank and waiting for an in-person assessment.
13. No Restrictions on Loan Use
Logbook loans come with no restrictions on how you can spend the money. David used his loan to pay for a combination of home improvements and medical expenses after a small accident, offering flexibility that a traditional loan might not have.
14. Suitable for Non-UK Citizens
Even if you’re not a UK citizen, you may still qualify for a logbook loan if you have a UK-registered vehicle. Elena, from Spain, used her car to secure a logbook loan to pay for unexpected study materials and fees, a crucial step in completing her degree.
15. Loan Sizes Vary
The amount you can borrow with a logbook loan can range from small sums to larger amounts, depending on your vehicle’s value. Tom borrowed £1,000 using his older car to cover holiday expenses, while his brother secured £5,000 using his newer vehicle for home renovations.
16. No Early Repayment Fees
Most logbook loan providers allow for early repayment without penalties. Olivia, who took out a loan for her wedding expenses, was able to repay the loan early after receiving a work bonus, saving on interest costs.
17. Repayment Holidays Available
Some lenders offer payment holidays, giving borrowers the option to pause repayments for a month or two. Jack, who experienced a sudden drop in income due to a seasonal job, took advantage of this option, giving him the flexibility to resume payments later.
18. Borrow Against Older Vehicles
Even older vehicles can be used as collateral for a logbook loan, as long as they are roadworthy. Ben used his 10-year-old car to secure a loan for a small home renovation project, something traditional loans wouldn’t have allowed due to his vehicle’s age.
19. Debt Consolidation
Logbook loans can be used to consolidate multiple debts into one monthly payment. Rachel had several credit cards with high interest rates. She used a logbook loan to pay them off and now enjoys a single, more manageable payment each month.
20. Avoid Payday Loans
Logbook loans often offer better terms than payday loans, which can come with extremely high-interest rates. Daniel avoided payday loans with a logbook loan, using it to pay off a high-interest credit card while enjoying a more flexible repayment schedule.
21. Continued Use of Your Vehicle
While your car acts as collateral, you can still use it for daily tasks. A taxi driver used a logbook loan to pay for an urgent engine repair on his vehicle, allowing him to continue working and repay the loan through his regular income.
22. No Perfect Credit Score Required
Borrowers with less-than-ideal credit can still secure logbook loans. Charlotte, who had been declined for a bank loan, needed money to relocate for a new job. She used her car to get a logbook loan, which allowed her to make the move and settle into her new role.
23. Short-Term Financial Solutions
Logbook loans can help address short-term financial needs without committing to long-term debt. Michael used a logbook loan to cover his child’s school tuition, paying off the loan in just 12 months once his finances stabilised.
24. Clear and Transparent Terms
Logbook loans come with straightforward terms, helping borrowers understand their obligations from the start. Emma, who was worried about hidden fees, chose a logbook loan because of its clear and easy-to-understand terms.
25. You Set the Repayment Schedule
Many lenders offer customisable repayment schedules to suit your financial needs. James, a freelance writer, structured his loan repayments to coincide with his irregular income, helping him manage his cash flow.
26. Emergency Medical Expenses
Logbook loans can be a quick solution to cover unexpected medical bills. Anna used a logbook loan to pay for an emergency dental procedure for her child when no other immediate financing options were available.
27. Great for Side Businesses
If you need capital for a side business, logbook loans can provide the necessary funds. Jonathan, an aspiring baker, used a loan to buy equipment and ingredients for his side hustle. As his bakery expanded, he was able to repay the loan early.
28. No Impact on Homeownership
Logbook loans don’t require you to risk your home as collateral, making them a safer option for renters or homeowners unwilling to use their property as security. Lucy, a tenant, needed extra cash to furnish her new flat, and a logbook loan provided the funds without risking her rental security.
29. Fast and Flexible Funding
Logbook loans provide quick and flexible funding compared to traditional bank loans, which can take weeks for approval. Alan, a graphic designer, used his loan to quickly purchase new software to take on more freelance work, helping him grow his business.
30. Fewer Eligibility Requirements
Logbook loans have fewer eligibility requirements compared to traditional loans. Alex, a recent graduate, didn’t have much credit history but needed funds for job-related expenses. He was able to use his car to secure a loan and get the job done.
Got more questions, feel free to reach out, and we’ll help you get the answers you need. Call the LoanOnYourcar.co.uk sales team on 0333 577 5000.
If you would like to see our legal contractual documents, these are available at www.loanonyourcar.co.uk.
Representative APR (Variable) Example:
Representative Example:
If you borrow £1,000 over 36 months at a flat rate of 84% per annum [fixed] with a Representative 204.2% APR you will make 36 monthly payments of £97.98, making a total amount repayable of £3,592.28 including £40.00 document fee and £25.00 Option To Purchase fee. The total charge for credit is £2,660.00. Logbook Loan repayment length from 18 to 60 months. The maximum APR is 389.1%.
Your log book loan is secured against the vehicle, and missing payments could put the car at risk of repossession.
Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk
