Us Personal Loans

There are no credit checks so people with bad credit can still apply.  The loan is secured on your car so there is no need for the lender to check your credit history.

When you apply online you are only asked for basic details about yourself and your vehicle.  The amount of money you can borrow depends entirely on the value of your car and not on on your credit score.

Why are logbook loans so popular?

Many people have been refused repeatedly by other lenders in the past and are unable to borrow money through the traditional routes. Whenever they apply they fail at the credit check stage.

The credit crunch and recession have caused the banks to tighten their lending rules considerably, which in turn means that more people are being refused credit than ever before. There are also some people who aren’t sure if they have a good enough credit rating to get money from the bank, but are too scared to apply just in case they fail the check and make their rating even worse.

This makes logbook loans attractive to many people with bad credit, but it doesn’t mean that they are the perfect solution for everybody. You’ll have to do their own due diligence to make sure it is the right thing for you personally.  For more information please see our frequently asked questions.

What is a credit check?

The reason banks and financial institutions run a credit check on potential borrowers is to verify that they are good for paying back the loan, in full and on time.  They want to know the credit history of each person to work out the probability of them repaying their debts.

Your credit score is based on a thorough statistical analysis of your credit history and is expressed numerically.  This allows them to quickly rate your creditworthiness in an objective way.

Lenders get these reports from credit agencies.  Citizens in the UK have the right to see their credit files for £2.  Many individuals like to look at their own records before deciding whether or not to apply for a loan or credit card in the first place, as all further applications for credit are recorded in these files for future lenders to look at. 

This score is developed from the person’s behaviour and activities in applying for credit and paying back loans and debts in the past.  There is a strong statistical correlation between these scores and the person’s actual likelihood of repaying the loan as agreed.  From the lender’s point of view it is better to simply rule out people determined a risk using this method rather than risk lending to them and not getting their money back.

What does a this mean for people with bad credit?

One of the main issues facing borrowers when applying for credit is that it is not possible to know in advance whether or not they will be successful.  In this case you might want to view your own credit report from an agency like Experien.  Each lender has their own policies about where the cut off point is, or  the “credit score head” as it is known.  The whole process is very complex and difficult to pre-empt, even for experts.

Another factor is that lenders simply do not need to reveal their minimum credit score to anyone so the borrower has no way of finding out what the differences between lenders are and to work out which is the best company for them to apply to in the first place.  The lender does not even have to tell someone why they have been refused.  This means that an individual cannot shop around for the company where they are most likely to pass, they simply have to leave it to chance due to lack of information.

What do I do next?

You can order your £2 credit report from Experien.

Read tips on how to improve your credit score at Money Saving Expert

See if you qualify for a logbook loan and read more about how they work

Compare the top logbook lenders offering loans for people with bad credit

Disclaimer: A logbook loan is secured on your vehicle. Your vehicle is at risk if you do not keep up with repayments. CompareLogbookLoans.co.uk is not a lender and does not give financial advice. All loans are issued by third parties.

Similar Posts:

• Logbook Loans or Payday Loans?
• What Is A Personal Loan
• Logbook Loans Ltd
• Were you mis-sold PPI on your car finance?
• Payday Loan Laws in Missouri