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Tuesday, 28th April 2009
Log Book Loans & What is a Log Book Loan
BBC Inside Out London (watch)
You can watch debt finance specialist Mike Thomas as he investigates the rise in logbook loans and exposes how unscrupulous car sellers are shifting their debts to unsuspecting buyers. Watch here - BBC Inside Out - London
Log Book Loan Self-Help Guide
In connection with Mike Thomas appearing on 'BBC Inside Out London' and then followed by 'My Worst Deal' we launched our bespoke Log Book Loan Self-help Guide.
The guide is designed to help you with arrears, repossession and excess charges. It also informs you of your consumer rights plus lots more.
Take me to the Log Book Loan Self-help Guide.
What is a Log Book Loan?
A 'Log Book' Loan is a loan secured against your vehicle, (a car or a motorbike). Having a log book loan means that you will lose your vehicle if you default on the repayments to the loan company.
How much can I borrow with a Log Book Loan?
Loans range from £500 to £50,000 according to the value of the vehicle in question.
Will I have to undergo a credit check for a Log Book Loan?
No, this type of loan is usually taken up by those whose record denies them access to the more usual forms of credit. Basically they are available to anyone irrespective of their credit history.
How do I qualify for a Log Book Loan?
Who keeps the Log Book?
The lender keeps it for security in case you do not pay.
How do I make payments back on a Log Book Loan?
Generally the standard term for a Log Book loan is 58 weeks, although it may be possible to pay it off earlier. Because the APR can be high it is advisable to pay it off as quickly as possible.
What is Representative APR on a Log Book Loan?
From the 1st February 2011 any business that offers loans or products on credit has to change the way they show their APR. It is no longer described as a 'Typical APR' but as a 'Representative APR'.
This means that 2 things have changed;
What does APR stand for?
APR stands for Annual Percentage Rate; it includes such things as
Lenders must tell you what their Representative APR is before you sign an agreement and it will vary from lender to lender.
What are the advantages of a Log Book Loan?
What are the disadvantages of Log Book Loans?
Do I have to sign anything or just hand over the log book?
You will have to sign Bill of Sale along with a credit agreement. By signing the bill of sale you temporarily hand over ownership of the vehicle to the loan company giving them the right to repossess the vehicle in the event of you defaulting on the payments.
How do I get paid by a Log Book lender?
Usually by cheque which will take several days to clear, some firms offer a quick cash service but can charge as much as 4% in fees for this option.
How do I know I how much I can borrow from a Log Book lender against the vehicle?
The firm will usually ask you to take the vehicle to an agent in a location of your choice together with some documentation.
When you meet with the Loan Officer/Agent, they will carry out a quick inspection of the vehicle and confirm the vehicle valuation provided over the telephone. Following this an offer will be made.
If you take up a Log Book loan it is important to remember that whilst you keep your car, the lender will keep your log book until you have repaid the loan.
What can I do if I can't pay my Log Book Loan?
We have a Log Book Loan Self-help Guide if you are experiencing problems with payments, are in arrears or being threatened with repossession.
We cover the following points;