Logbook Loan Companies In Scotland are so called simply because you will be required to surrender your auto’s V5 logbook as security for the loan.
However you will retain the use of your motor vehicle, however technically the lending company will own it until you have entirely repaid the loan.
Logbook Loan Companies In Scotland – How much can you borrow?
The total amount that can be loaned depends on the value of your car and is typically about 60% of the vehicle’s trade value, however it can be higher. Logbook loans for older vehicles are more challenging to obtain.
The amount is generally between £500 and £50,000 but obviously also depend on the client’s ability to make the payments.
Furthermore, the borrower must be over eighteen years of age, be the lawful owner of the vehicle without outstanding finance. During the term of the loan, the vehicle will also need to be covered with insurance, taxed and possess a valid MOT.
What you have to know before applying for Logbook Loan Companies In Scotland.
A loan against your automobile is considered as a high-risk finance option, due to the really high-interest rates imposed by such financial institutions. Interest levels may vary between 100% and 400% APR, rates that might even make credit card issuers blush.
They are aimed towards end users who have low credit ratings or simply no credit score and for that reason, are unable to secure financing from the high-street bankers or any other mainstream lenders. If you can’t keep up the loan installments the logbook loan lenders have the authority to claim your motor and sell it to recover the outstanding balance due.
Logbook Loan Companies In Scotland – What are the risks?
The finance company requires the client to sign a binding agreement which gives them the legal right to repossess the motor car without the need to obtain a court order and re-sell it. Virtually all borrowers will not be completely aware of the effects of signing these kinds of agreements. Additionally, there is little or no customer protection for the debtor.
Also, it is important to note that if the sale of the car or truck doesn’t cover the outstanding finance, is still responsible for the account balance. Overdue or missed monthly payments may incur a charge for chasing letters and phone calls.
A number of Logbook Loan Companies In Scotland don’t undertake appropriate credit rating checks on the consumer as the loan is a secured loan against your vehicle, so they have very little financial risk. Nearly all in addition fail to do proper affordability checks to make sure the customer can make the payments. The net results of all of this is usually that many fail to make the payments and fall even deeper in debt in addition to losing their vehicle. This will likely damage your credit rating even further.
Therefore it is best to consider all other options before you resort to this sort of financing. With a little luck, shortly all such financial institutions will need to be fully authorised by the FCA. This will give some degree of security for customers.
In the current financial climate, lots of people in the UK find that they have low credit scores and in many cases through no fault of their own. In this position, many are refused loans from the high street banking institutions and other lenders. Therefore they look at logbook loans as the only workable choice for urgent loans.
Here are some things to be aware of if you are determined to arrange this type of loan. Initially you really need to get a quote from a variety of Logbook Loan Companies In Scotland. Most opt for the first logbook money quote they obtain which is a big failing. Next compare Logbook Loan Companies In Scotland quotes since this will assure that as a minimum you get the best interest rate and terms available.
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