Eligibility Criteria For A Typical Logbook Loan A logbook loan is designed to provide a lending option to a wide range of people - tenants, homeowners, employed, self employed but especially those with a bad credit history, arrears, defaults, CCJs ... even discharged bankruptcy cases may be considered. A logbook loan is also an option for those who are struggling to obtain credit elsewhere or don't have a bank account Although a logbook loan is an option it is not suggested that it will always provide the right solution!

 

Eligibility criteria for a typical logbook loan is designed to be as open as possible. Because any loan issued by the lender will be secured by the value of a vehicle it represents a reduced risk to the lender meaning that money can be advanced to those who may struggle to obtain any form of finance elsewhere.

 

Often there is no requirement for any form of credit check on the applicant but there should always be an "affordability check" to ensure that the borrower can comfortably afford to repay the loan.

 

So, whilst it will vary slightly from lender to lender, just what is the typical eligibility criteria to obtain a logbook loan?

 

 

1: Must always be over the age of 18

 

2: Must also reside in England or Wales and many companies are now also able to provide for those in Scotland too 

 

3: Must be employed or self employed and able to comfortably afford the repayments

 

4: Must be the legal owner of a car or other vehicle that conforms with the vehicle criteria and is clear, or nearly clear, of finance

 

Credit history or rating need not be taken into account therefore those with CCJs, defaults, arrears can still apply.

 

There is no requirement to own a property - both tenants and homeowners can apply.

 

Proof of income if often not required either and so the employer will not be contacted and a bank account is not necessarily needed.

 

 

1: A Car, Motorbike, van, truck, motor home ... put simply, any vehicle with a V5 logbook

 

2: In most cases the vehicle should be less than a certain age, often 8 or 10 years old maximum

 

3: There should be no, or little, finance owing on the vehicle

 

4: Should be legally owned by the applicant

 

It may also be required that insurance and MOT documents be produced.

 

 

1: The maximum loan will be be based on the value of the vehicle - you will not be able to borrow more than your vehicle is worth

 

2: The loan will be secured against the vehicle

 

3: The applicant continues to drive and use the vehicle as per normal

 

4: The logbook is held as security by the lender until the loan has been repaid in full

 

5: Borrow from just a few hundred pounds up to a maximum, offered by certain companies, of £50,000 subject to vehicle value

 

6: Repayment term to suit from a few months up to a normal maximum term of 3 years

 

A logbook loan therefore provides a lending solution to any vehicle owner provided they meet a basic criteria which is far more flexible than any standard high street or main stream financial solution. In return for providing such flexibility interest rates may be significantly higher and your vehicle is at risk if repayments are not kept up so think VERY carefully, seek independent advice, and examine all options first.