The reason a bank or any other financial service provider carries a credit check on a client who wishes to acquire a loan is because they wish to know if they have the capability to pay the loan back. Past information like your credit ranking and how long you took to reimburse debts and other loans make up your credit score. They compute a history from this information to understand your credit worthiness. So, a score is made keeping all these parameters in mind and a cut-off is created above which loans can be offered. There is a very high correlation between people’s probability of repaying a loan and their credit score.

Acquiring for a loan which requires a credit background check will take longer than applying for a loan which doesn’t involve these formalities. This is because the credit score has to be acquired from a third party which specialises in such information and analysis.

What makes a logbook loan special is that no credit checks are needed when you make a request for such with a third party agency. A study on logbook loans will inform you that this loan is frequently employed by individuals with a record of low credit score.

Hence all these add up and come down to a situation where people with emergencies can quickly acquire borrow for a short period of time.

Most high street personal loans are unsecured. This might actually be a good thing. The alternative for a UK loan is a secured loan. Here are some reasons why you need to stay away from it.

* Your security (home, vehicle, property) could be taken away: A secured loan literally means the debt is secured on your house (or something else you own), meaning if you can't repay, the lender can repossess your home. With unsecured loans, it's much less likely this will happen.

* Interest rates on personal loans are fixed, while on secured are usually variable: Most of the unsecured loans come at a fixed rate. You know exactly what you will pay from the start, and it isn’t dependant on UK’s banks interest rates. While on the other hand, secured loans have variable rates, the lender can increase the payments as and when he wishes and this might hit people’s pockets hard.

* Secured loans are usually for a longer period: Although secured loans promise low monthly payments, it’s done to stretch the debt over many years. So you pay more, and interest charges are high as well.

* Secured loans give the lender security, not you: It's far, far, better to take a normal unsecured personal loan than one secured on your house. Secured loans are rarely a good move, and should be considered lending of last resort.

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