A loan secured against a car is also known as a logbook loan. The car is used as security to borrow money against it, which is paid off in weekly or monthly instalments.
A car is an asset and has a value, which means that a logbook lender will allow you to borrow money against it, providing the car has a high enough value. A loan is secured on a car using a Bill of Sale agreement which effectively means that the lender owns the vehicle for the term of the loan. These type of loans are usually known as logbook loans.
You as the owner of the car will still be able to drive it as you normally would and nothing will change in that respect which is one of the reasons why a loan secured on a car can be attractive.
Can you use any type of car?
Most types of car will be accepted, but the vehicle should be taxed, have a valid MOT and insurance and have no outstanding finance against it, or at least very little. If you aren’t sure if your car will be accepted then you can speak to one of our advisors who will let you know straight away on 0330 440 0101.
What are the requirements for taking out a loan secured on a car?
Together with having a car that doesn’t have finance against it you will need to show that you have regular income coming into your bank account. You can be fully employed or self employed as long as you show that you have a constant income.
You also need to show that you are able to afford the monthly repayments on the loan that you are taking out. We will run through an income and expenditure check with you just to make sure you have enough to pay for this.
Of course you need to be able to prove you own the car and that is easily done with your logbook or V5. We will be able to see your name on the document and that will show that you legally own the vehicle.
Representative example: Borrow £1300 over 18 months; rate of interest 120% (fixed) p.a.; representative 442.66% APR; total amount payable £3640 in 77 weekly payments of £46.67 followed by 1 final payment of £46.41. Warning: Late repayments can cause you serious money problems. For help or advice please go to www.moneyadviceservice.org.uk.
Please also see our Coronavirus help information
It appears you have entered your age is less than 18, Applicants must be aged 18 or over to apply. Unfortunately we cannot offer you a loan in these circumstances. If you think you may have entered this in error, please check your answers.
It appears the logbook is not in your name or your car doesn’t have a valid MOT or valid insurance. Unfortunately we cannot offer you a loan in these circumstances. If you think you may have entered this in error, please check your answers.
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Unfortunately, if your income cannot be verified by bank statements, we are not able to offer you a loan. If you think you may have entered this in error, please check your answers.