Logbook loans

Available to residents living in England and Northern Ireland a logbook loan is used as a way of borrowing as a way to cover the cost of a vehicle.

Ranging from between £500 and £5,000 a logbook loan is similar to vehicle finance, however, the money you borrow will be placed against the value of the vehicle.

When setting up a logbook loan you will be required to handover the registration or logbook documents – the paperwork will then be held by the company which administers the loan, meaning the company will own the vehicle until the loan is repaid in full.

This type of loan comes with high risks and it’s important to be aware that your credit score will be affected, you could lose the car should you fall behind on payments, and you will be required to repay the original loan plus additional interest charges.

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What is a logbook loan?

A logbook loan is simply a way of taking out a loan against a car or vehicle.

The logbook is actually the Vehicle Registration Certificate (RC5) which will need to be surrendered to the loan company to have the agreement approved. By doing so, you hand over ownership of the car although can still use it throughout the repayment term.

You will be unable to take out a logbook loan if you have outstanding finance on the car or if you aren’t the registered owner.

Should you fall behind on payments, your car could be repossessed and in some instances, you may be asked to sign documentation called a ‘bill of sale’ which means the loan company will own the car.

If you manage to stay on top of all payments during the loan term you will be given the logbook back upon completion of the loan.

Why do people use logbook loans?

Logbook loans tend to be the last resort, often used by people who have been unable to secure a loan from any other lenders.

Many companies will not conduct a credit check for this type of loan, making it a popular option for those struggling to obtain credit. However, a loan such as this can be very expensive and can come with interest rates as high as 450%.

This type of loan is often used by people struggling to pay back other debts or to cover the cost of an emergency or unexpected payment.

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Should I consider a logbook loan?

Due to the high cost and typical surrounding circumstances of a logbook loan, we always advise that people avoid this type of loan as much as possible.

Logbook loans also come with little security – certainly not the same as other car finance options.

It’s important to be aware that logbook loans often have additional fees and charges built in for things such as a paying your debt early as well as late payment fees. Loan providers are also able to take action for late payments, including bailiff action.

If you’re considering turning to a logbook loan as a way to cover the cost of other debts, it’s important to seek expert advice to determine if this is the best way to manage your debts.

If you’re struggling with debt or are looking for debt help, talk to TAD – our resident debt expert – for free and confidential advice.


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