A Better Alternative To a Logbook Loan
Over the years, logbook loans have been the most popular means of getting access to short-term credit.
12:10 14 July 2020
Especially for individuals in urgent need of money. However, following the significant risks that come with this option, the use of logbook loans has declined rapidly. Today, car owners have shifted interests to a better and more secure alternative of taking out a loan on a vehicle. This post highlights everything that you need to know about one of these alternatives, vehicle equity release.
What Is Vehicle or Auto Equity Release?
An auto equity release is a type of loan that allows you to borrow money against the value of your vehicle. This logbook loan alternative is simpler, safer, and quicker to apply. The auto equity release is more or less the same as a mortgage loan in structure and application. This means that the value of your car is used as collateral for the loan that you take out. One of the aspects that distinguish the auto equity release from a logbook loan is that you do not have to issue your car keys or logbook to get the loan.
Vehicle Equity Loan Application
The good thing with applying for a vehicle equity loan is that you can carry out each phase of the process online. All you need is an online platform, such as loanonyourcar.com, through which you can secure your loan. You will be required to fill out an online application form and have a video-call inspection of your car. Some of the documents that you will be required to submit are your vehicle’s registration number, the amount you wish to borrow, name, contact details, and your car’s mileage. Unlike the logbook loan option where a credit check is mandatory to acquire the money, you will only receive an affordability assessment for the vehicle equity loan. The evaluation of the process is undertaken digitally in its entirety.
Benefits of Vehicle Equity Loans
The fact that you can secure a loan against your car without having to surrender your car keys or V5C logbook makes vehicle equity loans an incredible choice for borrowers. The benefits of this loan type do not end there. Here are some more benefits of auto equity release loans.
A Hire Purchase Agreement secures an auto vehicle loan. The legislation behind this agreement is more recent and secure than the Bill of Sale that regulates logbook loans. With the Hire Purchase Agreement, you can secure a loan of up to 70% of your vehicle’s trade price. Vehicle equity loans are also not tied to a penalty if you choose to settle the loan earlier.
One of the reasons why auto equity loans have gained massive popularity over the years is that there is no point where borrowers surrender the ownership of their ownership. You continue owning your car even when using the borrowed loan. This contrasts with logbook loans where ownership of the vehicle in question remains with the lender until you make your last repayment of the loan.
For a logbook loan, you might need to work on your credit score to qualify. For vehicle equity loans, however, a credit score is not a mandatory requirement. This is because the loan is primarily secured against the value of your car and not your creditworthiness.
Terms of Repayment
When desperate for money, one goes for any available loan type, even when the option is risky. The vehicle equity loan, however, comes with some good news. The repayment terms for an auto equity loan are more flexible and safer. The loan comes with more extended repayment periods, with each period carrying a relatively small amount. This makes it extremely difficult for you to default a loan. Although the long periods come with some interests, they are much more manageable than the typical logbook loans.