A way for those who need fast cash but are worried about getting into serious debt by taking out a loan with a short term loans company now have a novel choice, which seems to bridge the gap between completely unsecured lending and a personal loan from a traditional lender like a bank.
Actually, the logbook loans company LogbookLoan.org.uk has been around for about ten years now and claims to offer a responsible lending service which answers the criticisms that have surfaced over the activities of short term loans providers.
The basic idea behind the logbook loan is that anybody who needs to get their hands on some cash quickly can use their vehicle as collateral. This applies whether the vehicle is a car, motorcycle, van or whatever as long as it has a log book.
The logbook is retained by the loans company until the loan is repaid. This does not stop the borrower from using the vehicle, but is a reminder that it is a good idea to pay the loan back on time.
The company says that it can deliver the cash quite quickly and the application for a loan can be done on line. The loans can be anywhere between five hundred pounds to fifty thousand pounds, which puts the loan range a bit beyond the usual limits of a normal instant cash loan, but like the latter the loans do not usually need a credit check. This is because the value of the car is used as security.
The amount of the loan that can be processed depends on how much the borrower earns and also the value of the vehicle they own.
Log book loans may seem to be an easy option for anybody who wants an instant cash loan, but the same principles apply with them about the costs of defaulting as with any short term personal loans.
The rate of interest rapidly escalates with increasing lengths of time the loan is repaid in, so anybody with genuine debt management problems is going to find the same possibility of falling into serious debt as with an instant cash loan.