3 Main Differences between Logbook Loans and Regular Bank Loans

With the economy slowing down more with every passing day and any financial reforms falling flat on their face, these are tough financial times for everyone. This situation is made worse by the fact that you might run into a financial emergency only to find that no bank is ready to sanction a loan against your name during these times.

The situation is worse for people whose credit history is not as perfect as it could have been. This is why logbook loans are enjoying an increasing popularity. Here are the 3 main differences between logbook loans and regular loans that you must know of before applying for one:

1. Necessity For A Credit Check

The logbook loans are becoming popular for one very important reason; the lenders don’t bother about your credit history when sanctioning a loan against your name. When you apply for a regular loan from a bank the bank will place an inquiry for your credit report from the credit rating agencies and assess your application accordingly. Once you are applying for logbook loans, this step is completely done away with.

This is the reason why logbook loans are a favorite among people not so amazing credit histories. This benefit is extended to the extent that people who have applied for bankruptcy can easily apply for an account of logbook loan and get one considering he has the necessary vehicle registered in his name.

2. Necessity For Being A Homeowner

When a bank sanctions a loan against your name, it insists that you are a homeowner (that is you own a property which has no mortgages on it) which will be used by the bank as a collateral security for the loan that they are providing you with. This is one of the biggest hindrances that many people face when it comes to applying for a bank loan owing to the fact that a lot of people might be staying on a rented property or have a mortgage on their property.

At the same time, when you compare logbook loans with other loans in this regard, the former comes out to be a clear winner. You can be sure that your loan will be approved by the logbook loan lender as long as you have the vehicle registered to your name and submit the registration certificate to him. You must also ensure that there is no outstanding car loan payment on the vehicle against which you are lending. The fact that you own a home or not own one makes no difference to him.

3. Speed Of Sanctioning

When you are applying for a bank loan the bank takes a considerable period of time to process your loan application and the loan amount doesn’t get credited to your account before weeks or days. This happens to be the biggest drawback of the regular bank loans that the logbook loans have taken care of.

When you apply for a logbook loan, the same will be sanctioned within the same day. What is better? When you apply for a logbook loan through the online portal, your loan will be sanctioned within minutes of successful submission of the application. These 3 are the main differences and pros that logbooks enjoy over regular bank loans.