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If you are considering applying for a this type of loan, it would be advisable to compare logbook loans. The term logbook is familiar to residents of the United Kingdom, but it may be a new concept to others. Basically a logbook loan is a secured loan where the borrower relinquishes the logbook of his vehicle in exchange for cash that is a short term loan. The advantage to the borrower is that he can keep his car and get the cash. This advantage does come at a price. If you have a bankruptcy or other undesirable credit history and are not able to get credit, a logbook loan may be the answer to your problem.

The term logbook is mostly unknown in the Untied States of America. Logbook originally referred to a ship's log where the time and distance traveled by the ship would be logged into a book. As often happens, the meaning of logbook has been expanded to include reference to a vehicle's registration certificate. A car owner will only gain possession of the vehicle's logbook when he has fully paid for the car and there is no financing or other lien attached.

Logbook is a colloquial term for a vehicle's registration certificate in the United Kingdom and in Ireland and Australia. With a logbook loan the borrower receives a cash loan from the lender, but the lender takes possession of the logbook until the loan has been repaid. The car serves as collateral for the lender. If the borrower defaults, the lender has the legal right to take possession of the car.

There are several lenders in the United Kingdom doing this type of lending. Lenders Mobile Money and V5 loans will provide the basis of comparison. Both companies are located in the UK. Mobile Money has thirty plus locations in the UK and borrowers must live in England or Wales. V5 Loans also has several branches, but the company has locations in England, Wales, Scotland and Northern Ireland. Therefore, V5 Loans has a much broader area of operation than its competitor.

The interest rate charged is a point of consideration. Mobile Money's rate is slightly higher than V5 Loans' rate, 385.2 percent versus 378.3 percent. The two competitors also differ in the duration of time to repay the loan. Mobile Money has a maximum loan life of six months compared to the V5 Loan maximum of twelve months. Borrowers will need to weigh the cost of the additional interest paid against their ability to repay the loan in the time allotted.

Logbook loan customers are typically people in temporary financial need who are not able to get cash through a traditional loan. Consumers should research the lenders and become fully informed regarding the terms of loan. Work with the lender to make sure you get the best terms for your particular needs.

Typically lenders will not loan the full value of the vehicle. Mobile Money's Website does not show what percentage the company will loan, but the amount is likely negotiable based on the vehicle's mileage, how well it has been maintained, and its age. V5 Loans advertise that it will loan up to seventy-five percent of the value of the car, a value that will be dependent on the aforementioned conditions. Both companies have a maximum allowable loan of 25,000 pounds. Consumers can find lenders that will loan a greater amount, up to 50,000 pounds, but the borrower will also be paying a higher rate of interest on a greater principle.

The expediency of logbook loans is what makes them attractive to consumers. If someone is considering this type of loan, it is prudent to compare logbook loans and review the terms of several lenders. It is certain that the borrower will pay considerable interest, but borrowers should definitely compare lenders to get the best loan available under the circumstances.