How To Release Cash From Your Car And Free Up Your Finances
Business growth consultant Daniel Groves explains how you can release cash from your car.
Your car is probably one of the most valuable possessions you own and one of the most expensive. And sometimes, you just need a little extra cash. Taking out a logbook loan on your car is a great way to free up your finances.
What Is A Logbook Loan?
A logbook loan is a new way of releasing finance on your car. Just like a mortgage, a logbook loan means that your vehicle is used as a form of collateral for your chosen loan amount. If you’re strapped for cash and you need to free up your finances, you can use a logbook loan to release money from your car without having to surrender your keys.
How Do Logbook Loans Work?
If you have been struggling to find and take out a loan in other ways, a logbook loan could be the answer you have been looking for. According to LoanOnYourCar.com, “The trade value of your car will determine the maximum value of the loan, therefore the more your car is worth, the more you can borrow against it.”
Once you have your loan, you can repay it back in monthly instalments that are manageable for you. Repayments can be made anywhere from 1 month to 3 years. What’s more, you can keep driving the kids to school, taking your car to work, and picking up the groceries. Basically, you can use your car in the same way you always did while enjoying the freedom of more finance.
The 3 Benefits Of A Logbook Loan
So, now that you know what a logbook loan is and how it works, what are the benefits? Not all loans are created equal and the type of loan you take out will depend on your individual circumstances and what you deem the best decision for your family. To help inform your decision, we have listed the benefits of logbook loans below.
1. Bad Credit History Doesn’t Matter
For many people looking to take out a loan, there is the worry about bad credit history. So many people are rejected for loans due to the state of their credit history. However, when it comes to logbook loans, bad credit history doesn’t matter. All you need to take out a logbook loan is proof that you are the legal owner of the vehicle. Having a bad credit history doesn’t stop you from taking out a loan in this case, making it a great way to raise funds when you need them. Of course, it is important to be realistic about whether or not you can keep up with the loan repayments. However, if you feel confident this is something you can manage, logbook loans could be the answer to your financial difficulties.
2. Raise Funds Fast
Depending on the value of your car, with a logbook loan, you could borrow up to £50,000 in cash. Just imagine what a difference that could make to your financial situation. Whether you need a new washing machine or you need funds to finish your extension or pay your kids way through university, a logbook loan lets you take out money on the value of your car and make monthly repayments that are manageable for you.
3. You Can Choose A Reputable Company
Loan companies tend to have a bad reputation. And sometimes, when you’re desperate for cash, it can be tempting to go for whichever company will accept you (despite their reputation or the extortionate interest rates they charge). Sadly, hasty and panicked decisions like these can often result in worsening financial situations. With logbook loan companies, your credit score doesn’t matter so you have the pick of the crop. As the choice is yours, you should always choose a company that is reputable and sets out its terms and conditions clearly. After all, you don’t want to get caught out making extortionate monthly repayments just because you didn’t read the small print. Reputable logbook loan companies share all of their information on their website and are upfront about the credit arrangement, repayments, interest rates, and more.
Is A Logbook Loan Right For Me?
You may be asking yourself whether a logbook loan is right for you. And that’s a good question to ask yourself. Freeing up your finances is a wonderful thing to do, but not at the expense of your financial security. That’s why, before entering into a loan of any kind, it is important to do your research and seek advice from an expert.
If you are still unsure whether a logbook loan is right for you, we have listed a couple of questions you can ask yourself to help shed some light on the decision.
- Can you pay off the loan quickly? The faster you can pay off the loan, the lower the interest rate will be.
- Are there extra charges for making early repayments?
- Will you manage your monthly repayments and keep a statement of account?
- Are you able to get your vehicle independently valued to ensure you are getting the right loan amount?
- Can you risk losing your car?
If You Can’t Make The Repayments
In the UK, around 12 million people struggle with loan repayments. If repayments can’t be made collateral must be claimed and in the case of a logbook loan, that collateral is your car. Missing a repayment is a risk that anyone takes on when they take out a loan, whether it be a loan on their property or their car.
That’s why it is so important to consider whether a logbook loan is the right option for you and carefully work out your finances and whether you can afford the monthly repayments over a set period of time. Taking the time to work these things out will ensure you make the most of your loan and don’t get yourself in further financial trouble.
Top tip: be reassured that most companies will only do this if you have fallen behind on several repayments over a set period of time. A default notice must be provided to you by law, allowing you a 14 day notice period during which you can make up any missed payments.
I hope you have found this article useful. If you are looking to free up your finances, releasing cash from your car in the form of a logbook loan is one of the best ways to do so.