Smart Guide to Logbook Loans

If you've been hoping to avail a personal loan but has a bad credit history, you've probably inquired about logbook loans. They are advertised as quick cash loans available for people with history of ccjs or defaults.

When you are refused a loan because of bad credit, logbook loans are here to save the day. But what exactly are logbook loans? This guide will tell you everything you need to know about the financial product.

What are logbook loans?

Logbook loans are secured personal loans that require collateral. In order to avail the loan, you need a vehicle you can use as security. You still get to keep and use your car while your lender has temporary ownership until the loan is fully repaid. This means that if you are unable to repay the loan, your lender can repossess the car as per the debt agreement and the bill of sale document you also signed prior to the loan’s approval.

Depending on your car's official trade value, you can borrow anywhere from £500 to £50,000 or up to 70% of said value. The loan is payable in 12 months or up to 36 months. In any case, it’s imperative to make sure that you pay your loan on time every month to avoid hefty fees or penalties.

What are the requirements?


To be eligible for a logbook loan, the requirements you need to meet are as follows:

  • You need to be of legal age, 18 years old or above.
  • You need to be a UK resident.
  • You need to be a vehicle owner.



For the vehicle to be accepted, it should be free of any financing and should not be more than ten years old. You'll also want to prepare the following documents to speed up your loan's approval.


How logbook loan works?

Because logbook loans are secured loans, the financial product offers larger loan amounts than other types of loans. But the best advantage for the product is the fact that it does not require borrowers to have good credit. Even if you have a less than stellar credit rating, you can still avail a logbook loan provided that you meet all the requirements.

If you do decide to resort to logbook loans for your financial emergencies, it helps to bear in mind that your car is at stake. With temporary ownership handed over to your lender, there's always the possibility of vehicle repossession. Avoid this from happening by following the simple rule of borrowing only what you need and what you can afford.

How much do logbook loans cost?

On average, logbook loans come with a representative APR of 400%. Some lenders may charge more while majority of the most reliable lenders in the UK are starting to reduce their rates thanks to stiffer competition.

The APR, which is a financial concept lenders use to give borrowers a more tangible factor to use when comparing deals, covers the loan’s interest rate, processing fee and related charges. When a lender advertises their deals with a 400% APR, that pretty much covers the loan’s full cost on an annual basis. But also keep in mind that most APRs you see online are just the representative. The actual APR your loan may come with can still vary, either higher or lower than the representative.

For a more in-depth discussion about Representative APR, head over to Money Saving Expert.