Where to find logbook loans for self-employed people

Where to find logbook loans for self-employed people
February 8, 2017 Cash Lady

where to find logbook loans for self-employed people

Getting a loan approved when you are self-employed can be more challenging than if you were in full-time employment. Particularly if you have a less than perfect credit history.

A logbook loan is a way to borrow money using your vehicle as collateral. Many lenders are willing to consider you for this type of borrowing if you are able to afford the loan repayments. Even if you are self-employed.

In this article, Cashlady looks at were to find a logbook loan if you are self-employed.

Getting a loan approved when you are self-employed

Self-employment is becoming more common in the UK. More so as increasing numbers of workers swap full-time employment for freelance work. The opportunity of being their own boss is an attractive one.

While this may offer increased freedom and flexibility, it can make securing a loan more difficult. Particularly if you have just started out with your new business or don’t have good credit.

Mainstream lenders, such as banks and building societies can take longer to approve loans for the self-employed. Especially compared to those in full-time employment.

They like to see two or three years’ worth of accounts to prove earnings and loan affordability. Also, sometimes it can take a long time to process the loan, which is not always convenient if you need access to finance quickly.

What if you are newly self-employed?

If you are newly self-employed then you will not yet have established three years’ worth of accounts. And, also you might not yet have a steady income as you work to build up your client base.

Unless you have a solid track record in your industry through what you were doing before, you may struggle to get a loan approved. Particularly if you are applying to main-stream lenders.

Securing a logbook loan when you are self-employed

A logbook loan is a way to borrow money using your vehicle. Such as your car, van and in some cases motorcycle, as collateral.

It is a secured type of loan, meaning the lender can sell your vehicle (the asset) if you fail to keep up with repayments. For this reason, you may find you are approved for a logbook loan, even if you have bad credit, are self-employed, or both.

What to consider when taking out a logbook loan

While a logbook loan provides a convenient way to access up to 70% of your vehicles’ value in some cases, it also comes with the risk of losing it. That is if you do not keep up with repayments.

The interest is typically higher than it is with loans from mainstream lenders. Although it is frequently lower than it is with payday loans, with rates beginning at 90.75%.

If you are considering a logbook loan, we suggest you familiarise yourself with how they work. You can do this by reading the articles in our logbook loan series, beginning here.

Securing a logbook loan on your company vehicle

If you would like to secure a logbook loan on your company vehicle it should usually be registered in your name rather than the company name.

If the vehicle is registered to a company name, you may still be able to access a logbook loan. However, the name should incorporate your name. For example, if Bob Smith’s vehicle is registered to ‘John Bob Smith Plumbing Ltd’, you may be eligible.

As with any type of logbook loan, the vehicle must have up to date tax, MOT and insurance and be free from finance, or nearing the end of the finance agreement.

Should you get a logbook loan if you are self-employed?

Should you get a logbook loan if you work for yourself?

The pros

· Access to a loan of up to £50,000 depending on the loan provider, value of your vehicle and ability to repay the loan

· Interest rates can be lower than with short term loans

· Repayment period of up to 36 months

· Quick and straight forward application process

· The money will often arrive in your bank account on the same day that the loan is approved

· You may be approved even if you are newly self-employed and have bad credit

The cons

· You could lose your vehicle if you do not keep up with repayments. If your vehicle is essential for running your business think carefully about whether a logbook loan is worth the risk

· Interest rates are typically higher than with mainstream finance

· There may be extra charges and fees for contacting you if your repayments are late

Where to find logbook loans for self-employed

You can find logbook loans on the high street, through stores like cash converters. Also, there are number of widely used logbook loan providers online that offer loans to the self-employed. We have listed three commonly used lenders below.

Mobile Money

www.mobilemoney.co.uk

Minimum loan amount: £500

Maximum loan amount: £25,000

Representative APR: 99.9%

Vehicle Value: At least £1000

Features: Mobile Money was established 17 years ago and is regulated by the Financial Conduct Authority (FCA). Plus it is a member of the Consumer Credit Trade Association (CCTA,). This means it adheres to a strict code of practice when lending to its customers.

If you are self-employed you will be asked to provide proof of income, via either accounts, income tax returns or recent bank statements. They will run a credit check but it will be a soft search and so it will not affect your credit score.

V5 Vehicle Solutions

www.v5solutions.co.uk

Minimum loan amount: £300

Maximum loan amount: £50,000

Representative APR: 495.12%

Vehicle Value: Depends on make and model

Features: FCA regulated and a member of the CCTA, V5 vehicle solutions ask for proof of income over the last 3 months. Mainly, ensure loan affordability. They do not run a credit check when considering your loan application.

The Car Loan Centre

Thecarloancentre.co.uk

Minimum loan amount: £1000

Maximum loan amount: £50,000

Representative APR: 90.79%

Vehicle Value: Depends on make and model

Features: The Car Loan Centre offers its logbook loans through a ‘hire purchase’ credit agreement, instead of a Bill of Sale. They claim that this way the consumer is offered more protection.

Final thoughts

There are no credit checks on customers applying for a logbook loan. Instead, they claim to base their decision to lend on current financial circumstances. Along with, the ability to repay the loan. Also, they accept self-employed customers.