When you apply for logbook loan, you are required to show various documents to prove that you are the vehicle owner, also known as the Registered Keeper. If you pass the initial checks, you will be asked to scan a copy or take a photo of the following documents and send them to the lender, including:
* Full UK driving license
* Copy of your logbook registration document (V5)
* Up to date MOT (upon request)
* Up to date Tax (upon request)
* Proof of registered address e.g utilities bill (upon request)
Additional Checks run by logbook loan lenders
Logbook lenders will run additional checks to assess the value of your car and decide the best loan amount that you can afford to repay.
No credit checks
Logbook loan companies do not carry out credit checks as part of the underwriting process. This is different to payday loans whereas a credit check will be to key to determine whether or not your application is successful. For logbook lenders, they consider that the applicant has financed their own vehicle successfully and the motor can always be used as security to cover the cost of repayment. Therefore, if you have bad credit, you can still be successfully funded provided that you own the vehicle.
However, if you fail to repay the logbook loan on time, this information will be reported on your credit file and then sent to various credit reference agencies. This may negatively impact your credit score and will alert other lenders who run credit checks on your take on more debt.
Value the vehicle
The lender will request your license plate in the application process and will value your vehicle accordingly. Some lenders used automated services in order to value your vehicle instantly to speed up to process. How much the vehicle is worth will determine how much you are able to borrow, with newer cars typically worth more than older cars.
Affordability checks are crucial to ensure that the borrower is not asked to repay too much because failing to repay will significantly increase the cost of their loan and may lead to the repossession of their vehicle. Using the valuation of your vehicle and salary, the lenders we feature will decide how much you are able to borrow. Examples of affordability checks that lenders may carry out include requesting a proof of income, bank statement or proof of the cost of your vehicle.