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If you do not keep up repayments your vehicle may be repossessed and sold by the lender without the need for a court order.
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Here is some important information about the practices used by many of the logbook lenders we list on money.co.uk. To find out about the specific practices and charges applied by your chosen logbook loan lender you will need to check their website and read their terms and conditions carefully before you apply.
You should always make repayments on your logbook loan on time and in full. The interest rates and information we list in our comparison tables assume that you will do this. Logbook loan lenders each have their own policies regarding non-payment, this affects the additional interest and charges they apply and the debt collection practices they use.
All logbook loans are secured against your vehicle, if you do not make your agreed repayments on time the lender may be entitled to take possession of your vehicle and sell it; they do not need a court order to do this. If the vehicle is sold for an amount which is insufficient to pay off the outstanding money you owe you may be responsible for paying any shortfall and could be charged additional fees to cover the cost of repossession. The repossession and sale of the vehicle will not always put an end to the loan agreement and you could end up owing more than the original debt in addition to the loss of your vehicle.
How much extra you are charged and the collection practices used for non-payment will depend on the logbook loan lender you have borrowed from; you should check this before applying. Your logbook loan payments may be taken out of your account automatically. However, if you do not have enough money in your account to cover the payment you are likely to incur extra charges.
If you think you may have difficulty making a repayment you should contact your lender immediately. Failure to do so could impact your credit score and result in additional charges.
Non-payment will also be recorded on your credit file. Repeated non-payment may have a negative impact on your credit rating and affect your eligibility for future borrowing. You should always make repayments on time and in full to avoid any repercussions on your credit rating.
If you fail to make an agreed repayment on a logbook loan most lenders will contact you by phone, post or email to rearrange your repayment. If you repeatedly fail to make repayments then they may use collection practices or take legal action. You should familiarise yourself with the collection practices of your chosen logbook lender before you apply.
If you are struggling to make repayments on a logbook loan you should contact your lender right away. You can also get free advice from debt charities like StepChange, Citizens Advice Bureau and the National Debtline.
If you suffer from poor credit and need to borrow money a logbook loan could prove to be the answer; but you need to be careful. Here's how to find the best logbook loan for your finances.