A logbook loan contract will not be complete without the bill of sale. A bill of sale is one of the most important documents in your logbook loan application, but what exactly does it stand for?
The bill of sale is a document that details the transfer of property from one party to another. A logbook loan will not proceed without this paper, because this serves as a proof that the vehicle was sold to the lender in exchange of cash. It also includes your signature to serve as the lender’s security in case you failed to pay the loan.
By law, the lender must notify the borrower first in the event of default, and the borrower should comply with the specified terms in the notice within a specific time period. Failure to abide will lead to vehicle repossession.
While the borrower can still keep the vehicle during a logbook loan, legality speaking, the lender becomes the rightful owner of the vehicle. Additionally, the law permits the lender to enter the borrower’s property and take hold of the car even without an order by the court. When it comes to the vehicle, it can also be sold in order to cover for any unsettled balances. However, the borrower should pay extra if the amount for which the car was sold for was insufficient. If there’s any excess from the sale, the borrower will be paid any surplus amount.
The bill of sale can be very complex or simple. It all depends on the type of transaction. When having a transaction that involves automobile for example, it is important that the bill of sale is completed properly and acquired by the time of sale. The bill of sale is also necessary to protect the general public.
If the bill of sale does not contain a signature, it is possible for the borrower to sell the vehicle even while a logbook loan was taken out of it. If the bill of sale was signed using illegal ways, or if the lender has utilised dishonest or immoral ways to obtain the vehicle, the bill of sale can be cancelled.