Logbook loans are the easiest and simplest forms of financing available in today’s recessionary markets. They are very flexible and offer large sums of money at affordable interest rates. Under this kind of loans, the borrower is required to submit the ownership documents of their cars or automobiles to the lending institution. The lending institution estimates the current market value of the vehicle and allots a certain percentage of the vehicle as loan amount. The borrower will continue to be the owner f the vehicle during the remaining period of the loan. However, the vehicle will be hypothecated in the name of the lending company until the loan is repaid.
Process of obtaining log book loans
The loan sanction process begins with the borrower submitting an application stating the amount of loan required to the lending company. The lending company, which is usually a bank or a financial institution, then conducts the appraisal process. The appraisal process is basically a background check of the borrower. The profession, sources of income, credit history, and property owned, etc are enquired and evaluated by the lender. Further, the purpose for which the present loan is requested for is also investigated to prevent mistreatment and misuse of the loan funds. The interest rate charged on the loan amount is determined based on the repayment period. Longer repayment period will be charged more interest rates as the lender has to endure more risk of defaulting by the debtor.
Features of secured loans
Secured loans are loans against which some collateral security is provided by the borrower. In case the borrower defaults in repayment, the lender can sell the collateral security, realize its proceeds and set it off against the amount due. Security provides assurance to the lender that his funds are secured and repayment is ensured. In case of borrowers they are able to use their immovable properties for raising funds easily without much legal hassle. The interest rates are also minimal than other sources of finance making it the best source of income for individuals and small scale traders. There are various firms in London that provide loans based on logbooks of vehicles with minimal interest rates.
Advantages of obtaining loans
The advantages of obtaining loans are different and varied for businesses and individuals. Businesses need funds to finance their routine business operations. It is not possible for them to raise funds through equity or debentures on a regular basis. Logbook loans provide companies the flexibility of easy procurement of funds which is not possible in any other source of finance. Individuals require money to meet personal emergency situations and unforeseen expenditure. Medial expenditure of loved ones, higher education of children, extensive vacations, acquisition of property, etc are require long term funds which these kind of loans offer at affordable interest rates. Further, the individuals can also pledge their personal properties like cars, houses or jewellery as security for the loans.