So… What exactly can I use a logbook loan for?
Sort out your finances with help from Logbook Loans…
One question that we often get asked at Logbook Loans is what a logbook loan can be used for. Many people think that some loans can only be used for specific purposes, so assume that if you take out a logbook loan then there are only certain things that you are allowed to use the money for.
But in fact, you can use a logbook loan for anything you like!
Let’s take a look.
What is a logbook loan?
Firstly, a quick reminder of what a logbook loan actually is. The word “logbook” is not really used these days very much, so you may not be sure what it is.
A logbook is another word for the V5C registration certificate of the car i.e. the document that proves you own the vehicle. The word logbook originated from the shipping industry, where a navigation tool called a log was used to estimate the ship’s speed. This evolved into a logbook that recorded all the important information for the ship, and the concept of a logbook was later adopted for many other uses.
When you take out a logbook loan, the ownership of your vehicle transfers to the lender for the duration of the loan. They hold onto your logbook (V5C registration certificate) until the loan is repaid. You still have full use of the car as normal. But if for any reason you are not able to repay the loan, your car could be kept by the lender to be used as repayment instead.
Therefore, when taking out a logbook loan, you need to be confident of being able to make the repayments for the duration of the loan. Once the loan is repaid, the logbook is returned to you and you fully own the car again; the lender has no further claim on the vehicle.
What can a logbook loan be used for?
As we said earlier, anything you like. There are no restrictions. Some of the most common reasons why people take out loans are:
- Pay off existing debts
If you are in debt then the last thing you need to do is take on more debt. But one possible way out of this is to take out a new loan to pay off all existing debt – credit cards, loans etc – completely. This is a way of re-organising your debt and having just one monthly payment to focus on each month.
You can then see more clearly how much you owe, and watch the amount reduce month by month as you make your payments. If you plan to do this, it is really important not to get into any further debt while you are paying off your loan.
- Job or business opportunity
It is a very difficult job market out there at the moment, and you may need a bit of financial help to get yourself into a decent job. When you think of the fact that you might need a decent outfit to wear, and may also need to pay for travel – or even an overnight stay – it could leave you out of pocket, even if you are given travel expenses afterwards.
But it would be worth making that investment if you end up getting the job and can move forward with your life.
- Home improvements and emergencies
Whether you plan to stay in your home long term, or are beginning to think about selling it, there are probably various things that need doing. Things that we tend to put off but could not only affect the value of your home but possibly also cause damage. So, for home improvements there is no time like the present.
Even worse is when you have a home emergency to deal with. We always plan to have some money set aside for emergencies, but this isn’t always possible, and some things just can’t wait. So, it’s good to know that a short term loan could help you out of an urgent domestic situation.
- House move
If you are moving home then hopefully you can use the opportunity to sort out your finances. For example, if you are selling a property you might be able to release some cash to pay off your debts and wipe the slate clean.
The problem is that sometimes there are expenses you have to pay up front during the process: for example, removal expenses, rental deposit or survey fees. A short term loan such as a logbook loan might be able to help here as you could get the money to pay these expenses then repay the loan back as soon as you move and the rest of the money is sorted.
- Family event
Nothing comes cheap. Whether you are having to pay for a wedding, a special celebration, a holiday, the patter of tiny feet, or even (sadly) a funeral, there are times when you need an extra injection of cash to see you through. A logbook loan could help you to get your hands on some money quickly, which you can then repay as soon as things calm down again.
- Medical or care expenses
2020 has been a very difficult year and has highlighted the number of people who need medical or personal care. If you have been waiting for medical treatment you may decide to look at the option of paying for this. Also, if you have a family member that needs a bit of extra care that you are not able to provide, then you could look at paying for occasional carers to help spread the load.
- Car repairs
To take out a logbook loan, your car needs to be roadworthy, taxed and MOT’d. But even so, there may be other repairs that need doing or you may be faced with something going wrong unexpectedly. A loan could help you to get these things done and keep your car on the road.
So, as you can see, there are various reasons why you may decide to take out a logbook loan. The above list gives just a few examples, but there are no restrictions on what you could use the money for.
We hope that the above information helps you to understand more about logbook loans and their use. If you may be interested in a logbook loan then do get in touch with us at Logbook Loans.