Car Loans – The New Generation

New laws on car loans have been revealed. High-interest loans secured on cars are to be outlawed under UK Government proposals tabled last week. So-called ‘logbook loans’ were archaic and enabled lenders to seize cars and other property from vulnerable borrowers without a court order, Kevin Brennan, the Consumer Minister, is quoted as saying in a report in The Times.
The report notes that about 40,000 people a year take out such loans, which it says are aggressively advertised on the Internet to bankrupts and people with poor credit histories or county court judgments. Typically the borrower can raise up to £5000 at short notice, paying interest rates of between 200 and 600%. But their cars are taken if they default and premises can be broken into to seize them.