It is unfortunate that most people are denied payday loans due to the fact that they are unemployed, self-employed or because their monthly spending is higher than their income. In other cases, this can be due to the fact that they do not meet the minimum net income requirement.
Another reason why you might be denied a payday loan is due to a bad credit history, defaults, and arrears with other loans — even when your salary qualifies for the loan. It is normal for the payday lenders to run a credit check to see your credit status every time you apply for a loan with them. But what happens when you are denied a payday loan? What other options are available for you?
Logbook Loans
If you own a car and live in the UK, then chances are you qualify for a logbook loan. These loans offer secured and same day loan solutions with the logbook of your car as collateral.
Fortunately, there are several companies across the UK ready to offer you logbook loans. However, when shopping for lenders, stick to those with a Consumer Credit License that allows them to offer such services. The Financial Conduct Authority provides this license. Such lenders are viewed as level players who you can trust. It’s also important that you read their online reviews prior to entering into any agreements with the lender.
The main advantage with logbook loans is that they are very fast to acquire with the process normally lasting for about 24 hours. Another reason why this option appeals to people with poor credit is that there are no credit checks. This means that even with a bad credit score, your logbook loan can still be accepted. This comes as a relief for most people dealing with a bad credit score who have a hard time securing loans in the market.
Qualifying for Logbook Loans
What do you need to qualify for a logbook loan?
- Applicant must be the legal owner of the vehicle with the logbook.
- The vehicle must be fully or almost fully cleared of finance; if you have two months or less on the repayment, some lenders may still accept you.
- The vehicle must be eight years old or less.
- Applicants must choose from loan terms of early repayment and up to 78 weeks settlement; early settlement does not attract penalty charges.
- Applicants are required to drive their car and drive back with the cash applied.
- Applicants retain their car while the logbook stays with the lender.
Some logbook loan lenders have been in existence for more than a decade. They have carved for themselves a strong reputation as responsible lenders. Most of these businesses will require applicant to fill an income and expenditure form to prove that you can afford the loan you apply for.
Of course, APRs of up to 437.4% are common. Although that’s quite high, the rate can be significantly reduced if you choose an early settlement. Keep in mind that there is no early statement charge.
Photo Credit: Omar Omar
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