How to Borrow Cash using your Car as Security

This article will look at how using your car as security, you can easily borrow cash at competitive interest rates. Decisions on loans arranged this way are usually given very quickly. Money can be transferred from the lending company within just a few hours.

How the Loans Work
If you own a car which is less than 10 years old, has valid insurance and a current MOT certificate and does not have any outstanding loans or other finance agreements attached to it, you can usually borrow a sum of between 65% and 75% of the cars value. These are also known as logbook loans as the V5 document (the “logbook”) is used as security for the loan. The process is relatively simple. The applicant fills out an application form on the loan company website and this is then checked by a member of the underwriting team. Once this information has been verified, the company will send a representative to your home to check the vehicle and its documents. Once the representative is happy with all of the documents provided, they will take the V5 vehicle registration document (which is the official proof of ownership certificate issued by the DVLA) as security against the loan. The cash will then usually be transferred to your designated bank account with twenty four or forty eight hours.

car loan


Advantages and Disadvantages

Loans against my car are usually granted very quickly once the application has been made.
– Interest rates are competitive compared to other types of unsecured personal finance such as pay day loans.
– Loans are granted without carrying out any credit checks against the individual, meaning that anyone with a bad credit rating history can apply for the loans.
– Multiple credit checks on individuals themselves can lead to a bad credit rating so no credit checks with logbook loans is another big advantage of borrowing cash by this method.
– All applicants must prove that they have a regular source of income which will enable them to repay the loan.
– In most cases the applicant can choose the amount of the monthly repayments to be made to make the repayments.
– The more trustworthy of the companies that offer logbook loans will allow early repayment of the entire loan, often without any penalty or additional charge being made.

There are a number of important things to considering when taking out any type of personal loan or finance; be sure to read the small print of the agreement you are entering into. It is also essential when taking out loans against my car to understand all aspects so an applicant must ask the lending companies questions if they are unsure of any aspect of the agreement which they are signing. When choosing a company to use when taking out a loan secured against your car, it is recommended that you use a reputable company, which is registered with the Consumer Credit Trade Association.

AUTHOR BIO

Sarah writes regularly on personal finance matters for a range of financial and personal interest websites and blogs. She has worked in the banking and finance industries for over twenty five years and has a particular interest in alternative methods of personal finance and loans. Her articles always stress the important things to know when considering personal finance issues.


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