Logbook Loan – Where Your Car Is Your Asset

Logbook Loan – Where Your Car Is Your Asset
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You need cash, but you cannot get a personal loan, borrow the money elsewhere or wait for the cash loan to clear, so you consider taking out a logbook loan, since that you do not want to sell your vehicle either. In such a case, the entity that is giving you the money is going to make you sign a bill of sale and keep your vehicle registration certificate as collateral. If you do not pay, they will take your car. Besides that, they will also sell it to cover your debt and if they do not receive enough to cover all you owe, they will go after your paycheck, house, anything else, up until they cover the full amount and expenses. If after all this you still think this is a wise idea, read on.

A bill of sale is a two centuries old legal gimmick that allows people to pawn stuff in order to receive money and still continue to use the pawned object. It was actually used to defraud people of the pawned object, very often a house or similar property. It got repealed to some extent and re-enacted with some safeguards for the common folk, but generally it is still the same kind of a deal. If you are late even one day, the lender can take the pawned asset away and there is nothing you can do about it.

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Logbook loans are still very popular, not because they are now fair and affordable, quite to the contrary, they have ridiculously high APRs, up to 500% p. a. and defaulting is almost always immediately enforced. The popularity is simply because there are a lot of people who have bad credit and/or are unable to get money from anywhere or anyone else. Just like in times two centuries ago, desperate people are an easy prey. Such an easy prey, that the Government moved to outlaw the bill of sale altogether, and logbook loans with it. Most of the criminal elements left this trade at such time, companies providing logbook loans had to gain a “Consumer Credit Licence” and to voluntarily follow a code of practice.

Nowadays, logbook loans provide amounts that are around 1000 quid, although there are offers available for much larger amounts, people seldom make use of it. Logbook loans are being used for re-establishing some credit history, if bad credit cannot be cleared by other means, or to pay for unexpected expenses that needed immediate funding. In such cases, people generally re-finance later by more sensitive means.

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