Experiencing personal cash flow difficulties is a common problem, and all too often, a loan is the only solution. But without owning property or possessing an excellent credit rating, it is virtually impossible to obtain a standard bank loan, and an unsecured loan with extortionate interest rates can be very costly indeed. An increasingly popular alternative is a logbook loan where a vehicle is used as security in exchange for money that has to be repaid in instalments. However, there are fundamental differences in how logbook loans operate within the UK that drastically affect the ownership of the vehicle.
What is a Logbook Loan?
A traditional logbook loan in England and Wales uses regulations based on a Bill of Sale, a law that predates the invention of the automobile. It was last amended in 1882 and can refer to any item with a monetary value. Once a logbook loan has been agreed, the applicant receives a sum of money that is influenced by the car’s value and the lender then takes possession of the car’s paperwork, including its registration documents. In law, the lender is now acknowledged as the car’s owner. Under the terms of the logbook loan, the lender allows the applicant to continue driving the car while the loan is being repaid. But missed payments can lead to the vehicle being repossessed and sold by the lender. However, such a loan in Scotland uses utterly different legislation.
Why are Logbook Loans in Scotland Different?
Logbook loans in Scotland are alternatively known as Vehicle Equity Release. They are based on much more recent legislation governing a standard Hire Purchase Agreement and not a Bill of Sale. Under the terms of the agreement, the applicant receives a sum of money, but this time, the lender does not take charge of the vehicle’s documents. Legally, the applicant is still the rightful owner of the car. Also, there are several other advantages to be gained when choosing a Scottish logbook loan.
Advantages of Vehicle Equity Release
The main advantage is retaining ownership of the vehicle. It enables the applicant to remain independent while continuing to use the car for work or recreation.
Anyone who is in the process of paying a fixed amount of installments to purchase a car can still apply for a loan through Auto Equity Release. This is because the car’s ownership remains unaffected. traditional logbook loan, logbook loans in Scotland, loan on your car
Logbook loans in the UK frequently incur incredibly high interest rates. Auto Equity Release takes several factors into account, including the car’s value and the applicant’s ability to repay the money. The interest rates and repayments will, therefore, be much more manageable.
A loan secured through Auto Equity Release is determined by the value of the vehicle and not an applicant’s credit score. It enables people with either a poor credit rating or none at all, to have access to borrowing money. In addition, once the repayments have been completed, they improve an applicant’s credit record.
LoanOnYourCar is a trusted, fully regulated company that offers quick and trouble-free loans through the Auto Equity Release scheme. It operates completely online with a fast and convenient application process. All stages of the procedure are entirely remote, with electronic document verification, e-signatures and affordability assessment. Vehicles are even inspected remotely through video-call, dispensing with the need for a personal visit. Once accepted, the borrowed money can be in an applicant’s bank account in less than an hour.
No Obligation Free Quote
Loan On Your Car offers loans from £500 to £100,000 depending on the value of the vehicle and the applicant’s ability to pay. For a no-obligation free quote, simply fill in the online application form with the vehicle’s registration number, mileage and the amount to be borrowed.