How it Works
Before applying for logbook loans, you need to have thoroughly gone through our Home Page to have an overview and become fully conversant with our requirements. Financial crisis mostly prompts us to go for loans, but it is vital that you evaluate yourself before you apply for one. Our logbook loans usually range from £500-£50,000. You could get up to 60% of your vehicle’s value. Logbook loans are majorly on a short term basis and therefore the interest they attract could be slightly higher than the interest earned on other loans from mainstream lenders.
The logbook loan process
The process of acquiring a logbook loan contains the following steps:-
The application stage
As soon as you apply for a logbook loan either online or at any of our branches, one of our knowledgeable underwriters will get in touch with you and arrange to meet you up in person to take you through the application process. At this point, it is important for you to ask all the questions you might have. A quote will be worked out based on the value of your vehicle and suitable monthly repayments set, based on your ability to comfortably pay. An independent assessor may be called upon to work out the value of the vehicle. This ensures that a fair conclusion is arrived upon. It is important to point out that you do not have to apply for the maximum loan limit for which you are eligible. A lower limit depending on your need is best applied for.
It is crucial for you to understand that breaching of the repayment terms could mean losing your vehicle. As a responsible lender, we only offer loans to persons we think will afford to pay them back and as such, approval is not guaranteed. Every application is screened and assessed fairly to ensure a win-win conclusion is agreed upon. After your loan is approved, you are ready for the next stage.
The verification stage
At this stage, a field agent is assigned to you and arranges a convenient time and place to have a sitting with you. You will be required to have the following documentation:-
- The logbook or V5 document. This is left in our custody.
- The vehicle which you intend to take a logbook loan against.
- Tax compliance certificates, the insurance documents of the vehicle and an MOT certificate.
- Your identification documents. (A passport photo, driving license or passport may be used).
- Monthly pay slips (in case you are employed) or recent invoices (in case you are self-employed).
- The most recent utility bills of your place of residence.
- Bank statements.
- The vehicle’s spare key (optional).
All the pre-loan documents with explicit terms and conditions are given to you. It is very important that you carefully read through every section of these documents and ask questions where you may not understand. Signing the documents makes you get into a legally binding agreement and breaching the terms and conditions of this agreement expose you to the risk of losing your vehicle. If you fully understand what the documents entail and are comfortable with our terms, then you can proceed and sign. The documents for which your signature is required are:-
- The credit agreement also called the fixed sum loan agreement. This clearly stipulates the main repayment plan
- The income and expenditure declaration form, and
- The bill of sale which technically makes us the vehicle’s owner for as long as the loan term lasts.
Once you sign, the representative once more takes you through the documents to ensure that everything is well covered and that you are fully satisfied with what has been offered. This process takes less than one hour. A cheque in your favour is then written and handed over to you, which only takes a few days to clear. If you prefer cash over cheque, we will ask you to furnish us with your baking details as well as the sort code. A date that you feel is appropriate that you make your first repayment is also decided upon.
The loan term
The agreed upon repayments are automatically collected from your debit card either monthly or weekly, depending on the agreement. Failure of repayment would prompt us to notify you in order to enquire on when we should expect it. Should you foresee such a situation, it is advisable that you inform us beforehand. Should we be unable to reach you either on phone, email, text or visits to your residence after several failures to make your repayments, your vehicle could be recovered and resold to pay the debt. Note that signing of the agreement gives us the mandate to resell your vehicle without a court order. This is because the consumer protection rights that apply in hire purchase agreements do not apply in logbook lending. If the vehicle is sold but the debt is still not fully settled, you are still liable for the deficit. This notwithstanding, promptly ensuring that the repayments are made promptly and in time saves you the risk of obtaining a bad credit history.
Partial payments can be made as they can greatly reduce the bulk of the instalment amount. Early repayments are also welcome and are greatly encouraged. These could reduce the amount of interest earned on the loan.
Communication on any difficulties or any assistance required is encouraged in order to help us resolve matters amicably. Should you require a top-up before your loan term has elapsed, this can be discussed with us and an agreement reached. If you happen to be unsure of the repayments you have made up to a certain point, a statement of account can be availed.
After the loan
After you are done making repayments, the V5 document and the spare key (if one was submitted) are dispatched back to you. The bill of sale also is dispatched and the vehicle ownership is reverted back to you. You are eligible for another logbook loan should there be a need.