Logbook Loans Pros and Cons

A logbook or V5 loan is a loan secured against the borrower’s vehicle. The term is derived from the way that the loan is processed, whereas the borrower is required to sign the bill of sale and submit the car’s V5 document or “logbook”, thereby giving the lender legal rights over the vehicle.

Pros

Quick cash. A logbook loan involves a fast process that enables borrowers to withdraw their cash within the same day. When you need the money for urgent needs, such as paying for hospital bills or household repairs, then a logbook loan can give you quick cash.

Easy access. Nowadays, logbook loan applications are usually done online, so you can submit your application without having to leave your home. The only moment that you need to is when it’s time to finalize the deal and take your money.

Privilege to keep your vehicle. Unlike car pawns, logbook loans let you keep your vehicle even while the loan is still in place. This means you’ll never have to worry about using public transport, or forcing yourself to obtain a short term loan that you can’t afford just so you can retrieve the vehicle immediately.

Larger borrowing limit. Because of the value contained in one’s vehicle, borrowers can access more cash than standard unsecured loans. Most of the time, the applicant can borrow as much as 50% of the car’s market value, so if you have quite a high-end vehicle, you’ll be able to cash in more.

Wide use for money. Because there’s a wide range of amount you can borrow against your vehicle, you can use the money both for small and large expenses. Whether it’s a sudden house repair, medical expense, or debt repayment, you can borrow the amount you need without the lenders even asking you why.

No credit checks. . A V5 logbook loan is a loan specifically meant for people with bad credit. There are no credit checks, meaning you can get approved for a loan even if you have poor credit rating.

Cons

Expensive. Because logbook loans are specifically designed for individuals with poor credit history, it is considered a high-risk business dealing on the lender’s part. Thus, in order to cover for these risks, V5 lenders naturally charge high APRs than ordinary loans. However, when compared to payday loans, .

Risk of losing collateral. Because a logbook loan is secured against your vehicle, there’s a risk to lose your property if you miss your repayments. Under the law, a logbook lender can legally repossess your vehicle if you default, and there’s no need for a court order to do this.