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Logbook Loans vs Same Day Loans. Which are Better?


When you need a quick cash injection, but can't go to the high street bank because of your poor credit rating, you still have two options. Logbook loans and same day loans. While these two types of loans are similar in some ways, they are also quite different. This article will explain the difference between the two and perhaps make it easier for you to determine which one to use when the need comes.


Logbook Loans


Let's start with logbook loans. This is a type of secured loan and they use your car as a collateral. When you apply for a logbook loan, the car's logbook document stays with the lending company. While you can still use the vehicle, keep in mind that, should you default with your payments, the logbook lender can sell your vehicle to make up for the difference. The loan amount is determined against the model, age and condition of your vehicle and your income. As such, it can be anywhere from £500 to £50,000. Also, in order to be eligible for this loan, you need to be at least 18 years old and to live in the United Kingdom. The car should also be free of any finance. A good thing about this loan is that, not only is the entire process of application and approval very fast and doesn't require a credit check, but that you can also continue to use your car.


Pros:

  • Available to people with bad credit
  • Can be received if you are self-employed
  • You can get larger amounts
  • The loan can be repaid over a longer period of time

Cons:

  • You have to own a car
  • The vehicle needs to be finance free
  • If you default on payments, the car can be sold

Same Day Loans


Same day loans are also known as payday loans. This is a type of short-term, unsecured loan and can be quite handy as a stop-gap measure when you need quick cash to deal with unexpected financial problems. The loan is connected to your paycheck, which means that it has to be paid usually within one month (or when your paycheck arrives). Like with logbook loans, the application process is also simple and most lenders provide a short online application form that you can fill from your own computer. In order to qualify for them, you need to be 18 or above years of age, employed, and have a bank account.

Pros:

  • You can get the loan for a very small amount
  • Receiving the money within 24 hours
  • Fixed charges

Cons:

  • The amount you can borrow is usually not bigger than £1,000
  • It has to be repaid in full with the next paycheck
  • High interest rates
  • More and more lenders require a credit check.