A couple of years back logbook loans entered the market with a swoop. People reckoned it is a new kind of loan business, yet it is perhaps based on the oldest law still applied in the UK, the bill of sale. The idea here is that you pawn away your car for cash money, but are still allowed to use it as your own, as long as you pay back your debt. Additionally, the idea is not to provide just another way of giving a loan to anybody. The idea here is to provide a loan possibility for people who have been turned down everywhere else. This is a loan that targets people with bad credit.
Since that it is deemed for people who have bad credit, the terms of such a logbook loan are not really favourable. For instance, representative APRs are generally very high, when compared to commonly approved loan rates. If you did not know, APR stands in for annual percentage rate. The logbook loan name stems from the fact that you give your vehicle registration certificate, otherwise known as logbook, to the lender as a security, or rather as collateral instead of leaving the whole vehicle there. The lender keeps your vehicle registration certificate for as long as you have any outstanding debt with that institution, i.e. you pay back the loan with interest.
The positive side of such a loan is, as mentioned, that no credit checks are being conducted. The main point is that the car is in an acceptable driving state and has no debt burden attached to it. Sometimes logbook loan lenders even accept a smaller burden to the car, which generally gets paid off with a portion of the loan. An additional plus is that you can receive the money very fast, mostly within a calendar day. The amount of money you can get will largely depend on the vehicle you own. For instance, you cannot expect to get a lot for a twenty year old rusty Impala. A relatively new Toyota RAV will net you solid money, an even better car, like the Jeep Cherokee will net you a bundle.
Be aware, though, that such a logbook loan is not very easy to pay back. The high APR rate makes the monthly or weekly rate higher than usual, additionally, you may wind up paying back three, four or even five times the amount you borrowed. If you make any mistake, or rather if you are late with payments, or miss one, you will most certainly lose your car, despite having paid back a lot of money, even more than the whole amount you borrowed. You may wind up owing them more than your car brings after having been sold, which propels the costs added to your outstanding debt into stratosphere.
Before you decide to borrow money by means of a logbook loan, make sure that it is the only option you have left and then make sure that you make it count. It is not a preferable way to conduct business, it is not even an advisable path to take, even if you think that there is no other way out. Next to the payday loans, logbook loans are the most expensive loans in the industry and you should know that before you commit to several months of obligations, which can cost you your car. Perhaps it is more advisable that you sell your car, you would get more money this way in any case.