Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

What is a Logbook Loan?

Get a no obligation quote!

Borrow between £250 and £50,000 and choose to spread the cost of your loan over 12 - 60 Months with easy to manage instalments.
450.5% APR Representative

What is a Logbook Loan?

A logbook loan is a type of unsecured loan that you take on your car. You don't own the vehicle outright until the loan is paid off, so the lender has ownership over it until then. However, the car is yours to use in the meantime, while you pay back the money you owe.

If you don't know much about logbook loans, you may want to read about how to use a logbook calculator, as well as what logbook loans are, how to get them, how to repay them, etc.

What's the Process Like for Logbook Loans?

You can apply for logbook loans online or on the high street. It's easy to apply for logbook loans online, because you can do it from home, or anywhere else you like, and you can fill out all the relevant information. However, you can also go and talk to someone in person so they can walk you through the entire process.

A logbook loan consists in handing over the car's registration and logbook. That means you are essentially transferring ownership of your property to the lender to serve as collateral until you finish paying your loan off. Should you be unable to repay your loan, the lending company keeps your car as payment. This makes the option a risky one for people in precarious financial situations. It can also lead to problems in case of an unexpected financial emergency.

To complete the transaction, you will sign a credit agreement, as well as another document known as a bill of sale. This enables you to continue to use your car as normal, even though you have handed over ownership for the time being, while you make the payments for your loan.

Pay attention to this part of the transaction – the bill of sale must be registered with the High Court in order to be legal, and without the registration, the lender would need court approval in order to take your car. You can easily learn how to check whether or not your bill of sale is registered at the National Debtline. You will need to apply in writing and pay a fee to check at the Royal Courts of Justice in London.

Once you complete the application process and you get accepted, you will receive the money into your bank account, with most lending companies. There are firms that feature cash services, but that option comes at a price that can be as much as 4% of your loan.

Please be aware that while logbook loans are available in Northern Ireland, Wales and England, they are not in Scotland, so you should be wary of anyone who offers you one.

How Can You Get Logbook Loans?

You can get a logbook loan if you own a car of some value, including papers, and are willing to put it up as collateral for your secured loan.

How Much Can You Get with Logbook Loans?

How much you can get will depend on what company you choose, as well as how much your car is worth. Generally speaking, the loans are from £500 to £50,000. However, you must be aware that not all lenders will offer you the same amount for the same car, and you will not get a loan for the full value of the car.

In fact, some lenders will only offer you around 50% of the total value of your vehicle. Should you default on the loan, that can become a major issue, because you're losing out on half the value of the car.

Obviously, a more expensive car is going to get you a bigger loan, while an older car, a less luxurious one, or one that has suffered use and/or damage will get you less money. You just need to decide if it's worth potentially losing your vehicle for the amount you get for it.

What Are the Repayment Terms for Logbook Loans?

The repayment timeframe for a logbook loan is generally a maximum of 78 weeks. However, you can make the full repayment earlier than the end of the term, if you can afford to do it, as it is a right you have legally. You cannot be trapped in this repayment contract longer than you need to be.

Interest charges might only be paid to the final month of your contract, with certain agreements in place. Please be aware that in that last month, you need to have repaid the full amount you took at the beginning. Before taking out a logbook loan, you must be positive repayment terms are clear and that you can afford the instalments.

As for the interest rate, the APR for this kind of loan is over 400%, which makes this a very expensive loan to repay and brings the interest to an amount almost twice as high as the original loan. A fairly standard loan of £1,500 that is paid over the full 78 weeks brings the total amount to more than £4000, with a weekly repayment of £55.

If you find yourself in a situation where you cannot repay your loan, you are at risk of getting your car repossessed, depending on how late you are with repayments. Legally, you must be given notice that allows you to respond within 14 days before taking your vehicle. It is advisable that you get financial or debt advice to deal with this issue. If the bill of sale is registered, the lender does not need court permission to take your car.

After your vehicle is repossessed, the next step is for the lender to sell it to recoup their money from the loan you've not paid. However, should the sale amount be smaller than the one you still owe, you will continue to be responsible for the difference. Please note that you can be sued for this money.

Quick cheat sheet for logbook loans
1. The value of your vehicle dictates the amount you can borrow. Trustworthy dealers will have you get the car valued by a third party.
2. The APR is extremely high, making the full-term loan very expensive. Try to repay early, if you can.
3. Technically, you can get a logbook loan even if your car is already put up as collateral somewhere else, but only if the previous loan is finalising soon.
4. Should you afford to repay early, prepare for charges if you repay over £8,000 in 12 months.
5. Ask for a statement of account to be up to date with how much you've paid and what is your outstanding debt.

This website or its third party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy.  By tapping on "I accept" you agree to the use of cookies. I accept