I need to borrow money fast with a low APR and no fees, what options are available to me?
I need to borrow money fast with a low APR and no fees, what options are available to me?
If you need to borrow money fast your need to know that there are three types of loan, there is a secured loan where you have something of value like your car or your home that the money is loaned against, if you donít keep up the repayments on a loan secured against your home or your car then your home or your car could be repossessed, the way to avoid this happening to you is to only take out a loan for which you are able to make the loan repayments, the more money you borrow the more your have to pay back each month.
The other type of loan available is called an unsecured loan, here the loan is not made against something you own like your home or your car, but the loan is made against you as an individual so if you have borrowed money before and where unable to pay the loan back or paid the loan back late then you have a poor credit record, this happens when the lender shares the details of the loan and the repayments you made or failed to make to a credit reference agency, then each time you want to borrow money the new lender will contact the credit reference agency to see if they should lend to you (good credit rating) or if they should not lend to you (poor or bad credit rating).
Unsecured loans carry a higher risk for the lender, there is no car to repossess or house to repossess so if you donít pay the loan back then the lender will have to take you to court, if the court finds against you then your have a CCJ (County Court Judgement) made against you and then it will be even harder to get a loan, when you donít pay the loan back this is called defaulting on a loan.
You might think that if you have no security on a loan then that means the lender canít take away anything of yours like your home or your car and whilst thatís true (the lender would have to take you to court) it also means that your paying more for your loan, firstly the lender will charge you a higher interest rate because with no security there is a greater chance that you wonít pay the loan back, and secondly the lender will be far more strict in who they lend their money to because of the risk that you wonít pay back so it will be so much harder to get an unsecured loan in the first place.
The third type of loan is called a guarantor loan, its like an unsecured loan in that there is no security like your home or your car involved in the loan, but because you might have a poor credit history and be unable to get the loan by yourself you can have someone guarantee your loan, this is when someone usually your parents agrees to make the monthly loan repayments if you are not able to make the repayments yourself, this means that they are ultimately responsible for the loan, even though they are not being given the money you are, the person selected as the guarantor will need to have a good credit rating with the credit reference agencies to replace your poor or non existent credit rating.
When your borrowing money fast your need to have a secured loan so that the lender knows that they will not lose money on lending to you and one of the most common types of security that people have and yet donít even know that they can get a loan against it, is their car, this type of secured loan against your car is called a logbook loan here in the UK, in the USA people call a logbook loan a car title loan.
Its exactly the same thing, its called a car title loan because when you take out the loan the ownership of the car or the title of the car is transferred to the lender until the loan has been paid off, in the UK we call car title loans logbook loans because they are named after the document issued by the DVLA (Department of Vehicle Licensing Agency) which records who has the car title or who owns the vehicle and that document is called the V5C document at the DVLA but because it records or logs who the owner of the vehicle is this document is often referred to as a logbook and hence logbook loan.
Logbook loans are the quickest type of loan because must of the questions or checking that a lender will perform on your loan application will be on your car and not you, it is the cars value and cars roadworthieness that are of most important, these car details are all checked automatically with the various car insurance and car ownership and value databases available to the lender, this means the loan application is incredibly quick as credit reference agencies do not need to be used to check your own credit history.
You might have heard of people buying a car that has a logbook loan against it and the new owner finding themselves liable for a previous car loan, thatís because a logbook loan really is taken out against the car and not against the owner of the car, as a point of note, you cannot sell your car when you have a logbook loan or indeed any type of loan taken out against the car.
Logbook loans are really fast loans but your need to insure a few things are in order to get the loan quickly, firstly the lender will want to know that your car is in roadworthy condition, this means that your car is on the road with valid insurance, road tax and an MOT certificate if your car is over three years old.
The reason your car must be in a roadworthy condition with these documents as having these documents (insurance, car tax and MOT) is the easiest way for the lender to quickly check through the various online databases that your car is indeed roadworthy.
As an individual you would be credit checked against a credit checking agency like Experian, but a logbook loan means it is the car that is being credit checked and the cars equivalent of a credit reference agency is an HPI check (Hire Purchase Investigation), this check is against an insurance and car loan lender database which car loan companies and insurance companies all contribute too, the HPI check will show if your car has ever been written off by an insurance company, because if it has it is obviously not in roadworthy condition and a logbook loan should not be issued against the car.
The other check performed by the HPI check is to see if there is any outstanding finance (loans) against your car, when you take out a loan against your car it means that the lender owns your car until you have paid the loan off and if you havenít paid off all the loan then the lender owns your car and not you, so you canít get a loan against a car that you donít yet own (because you havenít paid the loan back).
If you are currently paying a loan back (you know this because you are making monthly or weekly loan repayments on your car) then you can only borrow more money against the car (take out another logbook loan or other form of car finance) if you own over 75% of the car, this rules applies for all loans against your car and not just logbook loans, so for example you might have bought your car on a car loan from the garage where you purchased your car and this is also classed as a loan against your vehicle.
Because all the credit checks and car ownership checks are done online, your instantly be given a loan quotation, the quotation will have taken the car numberplate that you have entered and looked up the car make, model and age of the vehicle as well as the ownership details, this way the lender knows how much to offer you as a loan against your car, typically this will be 80% of the cars second-hand value, so if your car is worth £25,000 your be able to borrow £20,000.
The reason that you can only borrow 80% of your cars value and not 100% is that if you are unable or unwilling to make the monthly loan repayments and as a last resort your car is repossessed and sold then the lender will be wanting a quick sale so that they can get their money back quickly and its a lot easier and quicker to sell a car 20% below its market value to guarantee a quick sale.
You might be thinking about an old car or motorbike, van or truck that you have off road and in the garage, that you could use to raise some quick cash, but you have to remember that the vehicle must have valid documentation and if for example you have declared SORN (Statutory Off Road Notification) so that you are not required to have car insurance, pay road tax or get an MOT certificate, your have to get these documents before your be given a logbook loan.
So to borrow money quickly be the owner of your own vehicle and have the paperwork (insurance, road tax and MOT) completed, you donít actually need these documents to hand when you make the loan application as they are all checked online, but your need to make sure that they are current and do exist for the purposes of fast online checking.
Your have to decide how much you want to borrow and pay back, the logbook lender will offer you a loan for 80% of your cars value, that will mean that your borrowing the most money that the lender will give you, if you need a smaller loan then you can change the details on the loan quote to borrow less money which will be cheaper in both the loan amount that your have to repay and the interest that your have to pay on the loan.
Interest is added to the amount of money that your borrowing, it is the interest payment that is the cost of the loan, the higher the interest then the more you must pay back, you can also amend the loan term on the quotation, borrow money for longer and your pay more interest but have a lower amount to pay back each month.
With an online loan your have the money quickly because the loan will be transferred into your bank account the same day, this can be within minutes or hours of your loan approval, depending on the logbook lender your using.
The process of getting a loan is simple, apply online by entering your car registration online and once the loan quotation appears on the screen, accept the quotation and your be asked for your bank account details so that the money can be added to your bank account, you can then draw the money out with your ATM card (debit or credit card) or by simply buying items in stores and using your debit or credit card to pay for these items.
To borrow money from the bank your need to go into your bank and speak to the customer service person (often called your personnel banker), this person will then ask why you want the loan and look at your credit history to determine if the bank should offer you a loan, with a bank loan if the bank does not think that your reason for borrowing the money is a good one, then the loan will be refused, with a logbook loan which is secured against your car and therefore the lender knows that they can get their money back the reason you give for wanting a loan is unimportant, indeed the logbook lender is unlikely to ask why you want the loan.