Logbook loans are a type of loan that hasn’t really been around for too long. With the increase in people with bad credit ratings and the economic hardship we currently live in it was clear that at some point new and easier ways to loan money would come to the forefront and this evolution in loans are exactly what logbook loans are. Logbook loans work by securing a loan against your vehicle using your logbook and V5 document, the companies that partake in these types of loans have your car valued and that value (usually between £500 to £5,000) will be equal to your loan, the company will then basically take ownership of your car as security until you pay the loan back, you will still have custody of your car though. Now from here you can immediately see why Logbook Loans, if taken out irresponsibly, can be very dangerous.
The clearest danger is that if you don’t pay your loan back, you will lose your car to auction. Couple this with horror stories of some of the companies and you need to think very hard before you look at taking a loan like this out. Some companies who deal with these loans are tantamount to ‘loan sharks’ and there are many stories across the web of companies who ask for more money because your car didn’t auction for the amount they valued it, or repossess your car at the first chance without any kind of mercy to the customer. Many people already know that loans like this and payday loans are the last option if you are in serious need of money to help pay bills or just stay afloat and it’s understandable that people with bad credit ratings would go to extremes like this. If these kinds of loans are the only option you really have there are good companies out there, such as Logbook Loans 2 Go, who can help you out of your debt but it is also clear that you need to be very cautious and always research log book loans well and make sure you will be able to repay your debt or suffer the consequences and be left without your car.