You want to get you hands on some fast cash? There are several high interest credit options available, and one of them is the logbook loan. This option uses your car as collateral against the money you borrow. In effect the loan is attached to the car and not the individual. This is where the whole business can get very confusing.
According to Citizens Advice, the popularity of logbook loans is rising alarmingly. Between 2011 and 2013 the percentage of logbook loans taken out in the UK rose dramatically by 35 percent. The Citizens Advice Bureau put in a Freedom of Information request to the HM courts and the Tribunals Service in 2011 and found that an astonishing 36829 Logbook loans were sold in that year alone. In 2013 that number had increased to 49745, and the number is expected to rise substantially in 2014.
There are many similarities between a Payday loan (fast cash loan) and a Logbook loan. Both are quickly accessible, often online and with minimal credit checks. Both are handy when a quick loan is what is needed, the result being that money appears in your bank account in a few hours, a day at most. Both have a high APR, usually between 400 to 3000 percent, and are not the kind of loans that you would want to roll over. The interest rate on them is not made to support a long tem loan situation. Both instant loan types are also advertised extensively online.
The difference between short term immediate loans like Payday loans and Logbook loans is that Logbook loans attach themselves not to the person who is actually getting the cash, but to the vehicle that is used as security for the loan. What then becomes the big question is: how many loans has your car taken out?
Fred bought a car. It was second hand, but in great nick and just what he wanted. He was really excited! He had been saving up for a while to buy a good vehicle. He did do a vehicle history check, but didn’t really pay attention to which one. It was a history check that took minutes and cost 3 pounds. The car was given the green light, no unpaid finance, it was not stolen and the clock had not been tampered with. Fred bought it and drove off a happy camper. Now as Fred subsequently found out, sometimes it is worth it to go for a more substantial history check that includes a guarantee and mileage information for example.
Not long after purchasing his car, letters started appearing in his post box, and finally he got a visit from the Logbook lenders. He was told that either he needed to pay the loan or give up the car. It didn’t seem to matter whether he was the person who had taken the loan out of not. All that mattered was that his brand new second hand car seemed to be up to its bumpers in debt.