Tread carefully with logbook loans

Logbook loans are billed as fast, effective ways to get a loan without putting your house at risk and are particularly aimed at people with poor credit ratings.

A logbook loan is effectively a secured loan but typically you can get much faster access to cash. Borrowers don’t have to put their home up as collateral, but they do have to put their car up as security against the money they borrow in case they default on payments.

How do Logbook loans work?

Logbook loans do exactly as they say on the tin. You take out a loan with a specialist finance company and secure that loan against the logbook of your car. Most people know the term logbook as the registration form V5, which is used most often as part of a private sale of a vehicle.

The logbook includes details of the vehicle registration, VIN number and details of the registered keeper – ie. you.

If you take out a logbook loan, therefore, you must hand over the logbook to the lender until you have repaid all the money you borrowed. If you default on payments, the lender will repossess your car and sell it on.

One of the major benefits of logbook loans is that you can often get access to cash on the same day that you submit your application.


Logbook loans should not be considered a viable option for most of us. They are typically very expensive and many people will find cheaper ways to borrow funds.

This is why logbook loans tend to appeal to people with bad credit records. Because you are offering your car as collateral, lenders feel comfortable taking on customers with very bad credit histories – there are no credit checks at all with logbook loans and lenders won’t mind if you have CCJs to your name. However your car usually has to be relatively new and clear of any finance agreements plus fully paid up with insurance and tax.

Logbook loans should only be seen as an option of last resort. They are VERY expensive. If you were to borrow as little as £1,500 with Logbook Loans over 6.5 years, you’ll end up repaying over 2.5 times what you borrowed at £4,180.80. That’s an equivalent APR of 437.4%!


There may be alternative ways for you to borrow money. You may not be eligible for some of those headline rates you see in best buy tables, but by using credit checking filters online you should be able to find a loan that suits your needs.

Check out loans for people with poor credit ratings here to see what options are open to you.

But if money is tight and it feels like there’s no other option than looking for a Logbook loan, why not try speaking to someone first? Even major banks will set up repayment schedules that are more sympathetic to your circumstances if you simply cannot pay the bills.

Don’t bury your head in the sand and accept the worst – it could be that there are ways to repay your debts that won’t cripple you financially.

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