A logbook loan is a loan secured using your vehicle’s logbook. The loan covers a percentage of your car’s value irrespective of the age and model. In other words, it is an easy and quick way of getting a loan for automobile owners.
This means foregoing the rigid background and eligibility checks you receive from your bank when applying for a loan. Logbook loans in Nairobi and other cities in the country are an efficient technique for car owners to secure a substantial amount against their car. No one would ever imagine getting the amount they desire in 24 hours!
If you’re seeking quick access to cash, a car logbook loan offers the easiest route. By leveraging your automobile, you can receive a substantial amount based on its value in your bank account in a day. It is a popular option when you cannot access credit elsewhere
How Logbook Loans Work
- Usually, you’re asked to hand over temporary ownership of your car to the lender. However, you are allowed to continue driving the car as long as you keep to the terms of the agreement
- As part of the loan application process, you’ll hand over your logbook to prove ownership
- The lender will also conduct an HPI check on your car. This is to assess its value as well as ensure that it’s free from finance and that you are the registered owner
- You’re asked to provide personal details including
-Financial information such as your income
- Another eligibility test is running a credit check to review your loan affordability. However, it’s expected of you to take personal responsibility and ensure you are able to pay back
- Depending on your lender, this process can be completed online, on the phone, or in person. Still, in some cases, the process can be finalized in as little as one to two hours
- The borrowed amount is deposited in your bank on the same day. Other lenders may offer other options such as cash or a cheque.
- After paying off the loan, the car ownership is transferred back to you.
- In the event you don’t keep up with the repayment plan, the lender may sell your car to recoup their money
Benefits of a Logbook Loan
- A logbook loan allows you to borrow a larger amount of money compared to a payday loan or personal loan
- A logbook loan typically has a repayment period of between 12 – 36 months. This is much longer than you get with a personal loan. This means more time to get your finances in order
- In certain scenarios, it’s possible to offer partial resettlement by repaying a chunk of your loan early. This reduces the interest on the remainder of the loan.
The quicker you repay your logbook loan, the lower the overall interest you will payback. Where possible, pay back the money as soon as possible.