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.
Using your car to secure a loan may be a way of borrowing money if you suffer from a poor credit history or are on a low income and really need to access funds.
However, log book loans can be a very expensive way to borrow so if you decide to take one out you need to shop around to find the cheapest option possible.
Here’s what you need to do to find the best car logbook loans UK providers have to offer.
Before looking for the best logbook loan, you should check that you can’t borrow money from another source.
Not only are log book loans an expensive way to borrow money they will also put your vehicle at risk as the loan will be secured against your car. This means that if you don't keep up your repayments the lender is entitled to take your car instead. So if you can borrow money from another source it may be a better option.
Even if you are looking for logbook loans because you suffer from bad credit there may be other options that are more affordable.
Read our guide: How to Borrow Money With Bad Credit for a rundown of the different options available to you.
Check your vehicle qualifies for a loan
Logbook loans are based on the trade in value of your vehicle so before you start getting quotes you will need to assess your vehicle’s value.
Most logbook loan providers will lend up to 50% off the value of your vehicle (as assessed by the logbook loan company), providing you own it outright and don’t have an existing finance agreement secured against it.
Essentially this means that the amount you might be able to borrow is restricted to up to half the value of your car.
There are also likely to be strict criteria to the type of vehicle logbook loan providers will accept, with most putting an age limit and other restrictions on the type of vehicle that will be considered.
Compare loan rates
The main factor that will determine the cost of your logbook loan is the interest you will have to pay.
Every log book loan company must display a representative APR, this is an illustration of the interest you might have to pay on a logbook loan should you apply and is a good way to compare the relative costs of each loan.
You can compare logbook loans and their interest charges side by side using our car logbook loans UK comparison table, which includes the top 10 logbook loans available in the UK.
Use this table to narrrow your options down to the top 3 logbook loans that meet your needs, look at which gives you the cheapest access to the money you need and then, if you have no other cheaper option available to you, consider applying for the best loan for your finances.