Borrowing money can be a challenge, especially for people with poor credit records or limited income. This is when logbook loans in South Africa can help.

A logbook loan is a quick and discreet short-term financing option designed for vehicle owners – regardless of financial standing or employment status.

Pawn My Car offers logbook loans secured by sedans, SUVs, bakkies and trucks in Cape Town, Port Elizabeth, Durban and Johannesburg.

What are logbook loans?

Logbook loans are a type of short-term secured loan. Funds are released against a saleable asset. In this case, the asset is a fully-paid up vehicle.

Some finance providers expect the borrower to sign a bill of sale. By doing that, the borrower technically relinquishes ownership of the car until the loan is repaid.

How does a logbook loan work in South Africa?

Providers of logbook loans in South Africa offer cash in exchange for collateral. Borrowed funds are typically secured in one of two ways:

• The logbook, or official registration document, of the vehicle in question is handed over in what is known as a pawn-and-drive loan.
• Both the car and logbook are held as collateral for the loan.

The logbook, or the logbook and car, is returned once the borrowed capital and agreed interest have been paid back.

Pros and cons of logbook loans

Logbook loans are easy to get. Anyone who owns a good condition vehicle is virtually pre-approved for short-term funding.

There are no arduous qualifying criteria. Lenders don’t perform credit checks or request bank statements, proof of income or any other documents to support the loan.

Repayment terms are flexible and typically range from three to 24 months. Depending on the finance provider and individual circumstances, loans can be settled early or extended on request.

Financing is completely confidential. Credit agencies are not alerted to transactions. Loans have no impact on a borrower’s credit score.

However, if the money is not repaid according to the loan agreement, the vehicle can be resold to recoup the lender’s losses.

When a logbook loan is a good alternative

A logbook loan is a viable solution for people who require quick access to funds. It can be used to cover medical or dental expenses, repairs to the home, or business inventory and equipment.

The only proviso is borrowers must have the financial wherewithal to repay the loan.

What to be careful about

There are lenders in South Africa operating “pawn-and-still-drive-it” schemes.

These schemes involve the lender taking ownership of the vehicle as part of the loan process. Schemes of this kind should be avoided.

South Africans who take out these loans have an unreasonably high risk of losing their vehicles – whether they default on their payments or not.

As for any loan, it’s important not to take a logbook loan unless you’re certain you’ll be able to pay it back according to the agreed loan terms.

Next step: how to get logbook loans in South Africa

To get a logbook loan, start by choosing and contacting a suitable lender. Ideally, opt for a car pawn company that is a registered financial services provider (FSP) and has multiple physical branches.

With some asset-based lenders, like Pawn My Car, you can start the application process online.

Just provide details of your vehicle. If eligible, a consultant will contact you with an initial loan offer.

You’ll need to arrange to have the vehicle physically appraised. A formal loan offer is then made, based on the assessed resale value of the car.

If you wish to proceed, an agreement is drawn up and signed. The vehicle and logbook are handed over for safekeeping until the loan is cleared. It is then returned to you in the same condition you left it.

Getting logbook loans in South Africa with Pawn My Car

With Pawn My Car, you can use a car, bakkie, truck or boat that’s in your name to secure a loan quickly and easily, with no delays or laborious paperwork.

For more information, contact us on 0861 112 866, WhatsApp 064 976 7106 or simply complete and submit our online application form.

Complete an application now