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Big5 Loans Posts

Logbook Loans – Another loan alternative

At Big5 Loans, we offer another form of lending called bad credit logbook loans. Now you may have heard of this credit product, but aren’t sure of how it works or what it entails.

What is a logbook loan?

A logbook loan is secured against the value of a vehicle you own, be it a car, van, truck or even motorcycle. With this product, you can secure a loan with affordable repayments within 24 hours while still using your vehicle daily.

Perhaps best of all – there are no credit checks made against you when you apply for a loan such as this so even if you have a bad credit rating, you are able to secure a loan.

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The amount you can borrow depends on the condition of your vehicle and the mileage. We keep your vehicle logbook for the duration of the loan but as soon as it is paid up and closed, we return it to you.

Why do we keep your logbook? Well, this proof of ownership offers us the security we need should you stop paying your loan. Note, you cannot secure a logbook loan on a vehicle that you are still paying off.

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How do I secure a logbook loan?

To be eligible for a logbook loan you need to meet the following criteria.

  • You must be older than 18 years of age.
  • You must reside in the United Kingdom.
  • You must earn a monthly salary and have payslips for the last three months
  • The vehicle must have comprehensive insurance.
  • You must be the legal owner of the vehicle.
  • We require proof of ID, proof of residence and the MOT of the vehicle

Should you be interested in securing a bad credit logbook loan, bring the relevant documents and apply at our offices. 

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Can guarantors remove themselves from a Tenant Guarantor Loan contract?

If you are planning on acting as a guarantor for someone or perhaps planning to ask someone to be your guarantor when applying for a tenant guarantor loan, consider the following.

One the loan agreement is signed and the money is deposited into a banking account, the guarantor is bound by the contract, and cannot remove themselves from it.

Therefore, choosing the right guarantor is imperative. At Big5 Loanswe pride ourselves on the fact that we go the extra mile to ensure that the applicant and the guarantor they have secured are educated thoroughly regarding the product.

Let’s look at a few common questions we face during this education process.

Why can’t a guarantor be removed?

Well, as someone that has agreed to pay the monthly repayments should the applicant not be able to, the guarantor is crucial in the application process for the loan. That is why we determine if they are fit to act as guarantor by checking their credit history, affordability, age and other factors that determine whether they are suitable or not. For this reason, they cannot be replaced at all, especially as a new person might not have the necessary credentials to act as a guarantor, significantly changing the risk profiles attached to the loan agreement.

Can we replace my guarantor?

No, for all the reasons mentioned above. In some circumstances, the spouse of a guarantor can replace them in the case of a death. This often is a choice that the lender will have to make.

My guarantor wants out! Is there a way?

There is only one way for a guarantor to be released from their obligation – the loan must be paid up in full and the agreement, therefore, terminated. Luckily, by paying a little more than the required monthly premium, it is possible to repay the loan earlier than the terms agreed. Note, you may be charged a slight interest adjustment if the loan is paid off within a certain time frame.

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I have an idea! What about more than one guarantor?

Unfortunately, that is not possible. We do suggest that when applying for tenant guarantor loan that you have a few possible people in mind to act as a guarantor in case your first choice is not suitable. Remember to discuss this with them beforehand.

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Can previous credit checks affect future loan applications?

Each time you apply for some form of credit, be it a loan or a credit card application, lenders are obliged to run a credit check. This leaves something known as a ‘search footprint’ which shows that your file has been checked by a lender, particularly in areas such as payment history, the credit you currently have with other lenders, your status on the electoral role and if you have been declared bankrupt.

How does this affect you when applying for our a guarantor loan?

Well when you apply for such a loan, the lending company will now apply checks to both you as well as the guarantor. This helps them to decide whether you are eligible for a loan and if so, exactly how much money you can borrow. This information on your credit file is always up to date, providing the lending company with the most accurate information at all times.

Can too many search footprints be a bad thing to have on my credit file?

Let’s just get one thing straight. A search footprint does not in any way affect your credit score. However, too many of them can affect your chances of securing credit in one form or another, be it a loan or even a credit card.

Why?

Well, too many search footprints, especially in quick succession, make it seem like you are desperate to borrow money. Now in some cases, such as an emergency, you maybe, but if you are turned down, rather wait a few months before trying to secure credit elsewhere.

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Numerous search footprints right after each other are seen by lenders as awarning sign and they worry particularly about whether you will pay the loan instalments back. Aim for around 12 search footprints every year as these numbers are considered to be normal. In fact, too few searches could be a problem as well as they indicate that you do not have a very active credit history, another reason why a lender might not give you a loan. It really is a fine line that you need to balance on!

There are a few other considerations to bear in mind when it comes to your credit file.

  • Applications or quotations will stay on your file for 12 months.
  • If any lender has searched regarding debt collection, their search details are active for 2 years.
  • Records for fully paid off or defaulted loans have search footprints that reside on your record for 6 years.

‘Hard’ v ‘Soft’ search footprints

We have discussed ‘hard’ search footprints in great detail so far in this blog. They are the searches applied to the person wanting to apply for acredit product. ‘Soft’ searches are slightly different. This is usually applied to the partner/spouse of the person applying for the loan, especially if they have a joint mortgage. It could also be applied to the person signing together on a guarantor loan. These searches disappear instantly from the secondary party’s record.

Can I access this kind of information?

Credit reference agencies will allow you to check information on your credit file. These include Noddle and Checkmyfile. They initially offer a one-off free trial but if you need to check your credit file again in the future, you will need to pay.

By being able to see your credit file, you can help to manage your search footprints which can secure credit products in future. It can also be used to see if methods you are using to build your credit score are working.

 

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Tenant Guarantor Loans

Financially, we all understand that times are hard!

With the economic downturn since 2008, many people are living from payday to payday, carefully budgeting to ensure that they can keep their families fed and clothed. Unfortunately, this does not cover those unforeseen expenses that happen from time to time – things such as medical bills, car repairs or even an untimely family bereavement.

It is in times such as these that we have to turn to the many loan or credit products available on the market. We at Big5 Loansspecialize in both tenant guarantor and logbook lending products. These are quickly becoming one of the favoured loan products in the UK.

What is a tenant guarantor loan?

When applying for a tenant guarantor loan you will need another party to co-sign the loan and act as a guarantor. This provides extra security for the lender and in turn means that more money can be lent at far better interest rates.

Before with guarantor loans, this person had to be a homeowner but with the tenant version of this product, they no longer have to.

This is particularly helpful as more and more people are finding it far more difficult to own their own home in the current economic conditions.

Who is eligible to sign as a guarantor?

Well, this is up to you. Most people approach their partner/spouse, parents, other family members, friends or even colleagues from work. There are a few requirements, however.

The guarantor needs to

  • Be younger than 65 years of age.
  • Have an excellent credit history.

They can be employed or retired while their income level is of no significance to the application. Of course, they will be subjected to credit checks. By signing the loan contract, this guarantor will be subject to meeting the monthly loan repayments should you not be able to. Rest assured, when applying for such a loan, all of these details are discussed in great depth before any application is processed and any loan approved.

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What documents do you need to apply for a tenant guarantor loan?

As with any credit product application, you will need to bring in the following documents when applying for a tenant guarantor loan.

  • Proof of address.
  • Proof of income (we will need your three most recent payslips).
  • Proof of identity (either an identity document, passport or drivers licence).
  • A breakdown of your monthly expenses.

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How long does the loan application take?

If you have all the correct documents and your guarantor on board, the application itself should not take more than 48 hours. We understand that by coming to take a loan, you need the money urgently, and for this reason, we do everything in our power to ensure we process everything as quickly as possible.

To apply for a loan, either phone our call centre, email us or come and visit our office. Remember, together with your guarantor, you will need to physically sign documents. For this reason, a trip to our office is perhaps the best way to apply for the loan.

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