Logbook loans are a valid secured credit option , an alternative to short term loans and credit cards. Quick Loans Express explores the logbook loan industry.

What are Logbook Loans Online?

A online logbook loan is a type of secured loan using your car as collateral. Most logbook loan companies will allow you to borrow money similar to your car’s value. The amount you can borrow varies between £500 – £50,000 or up to 70% of your car’s value. Some logbook loan companies will only let you borrow up to half of your car’s value.

Once you have agreed to a loan deal, the car belongs to the logbook loan company if you cannot repay the money. On borrowing, they will usually ask the car owner to hand over the registration number and the logbook to prove this arrangement. In reality, your car will now belong to the logbook loan company, because of the ‘bill of sale‘ however, you can continue driving it within the time frame of your borrowing agreement. Logbook loans are also available without online applications

Where are logbook loans available in the UK?

  • England
  • Wales
  • Northern Ireland

Logbook loans are not available in Scotland.

How will I receive my logbook loan?

Usually, the lender will electronically wire the money into your account. However, some companies may offer your loan in cash with an extra charge of up to 4%.

How and when do I pay back the logbook loan?

Logbook loans are effectively a secured short term loan. Each loan arrangement will be different, but they usually run up to 78 weeks or 18 months. Depending on your arrangement, your lender may charge just interest payments and the main loan at the last payment.

According to the law, logbook lenders have to accept early repayment, this can be with or without a fee. Repaying early often allows you do pay less interest and therefore will save you money.

Before you take out the loan, you must make sure you understand the logbook loan agreement and if you will be able to afford to make the repayments.

How much is a logbook loan expected to cost?

Despite being a secured loan, logbook loans are not all that cheap. The APR for logbook loans sit around 400% and above. Considering you are putting your car on the line, this is not cheap. You will be expected to keep up with your repayments as most logbook loan lenders do not offer direct debit payments.

Repaying your logbook loan

The repayment for logbook loans usually involves paying in instalments. Instalment repayments can be weekly or monthly, in interest only instalments or loan instalments. You will need to keep up with the repayments, so you do not default.

What happens in I can’t repay?

If you cannot repay your loan, the lender is entitled to appoint bailiffs for your vehicle. They are unlikely to appoint bailiffs until the borrower defaults in several payments. Also, legally they have to send you a default notice. However, you will need to respond within 14 days. Lenders do not need to go to court to seize your car if a bill of sale was completed. If your seized car sold for less than the loan amount, you will still need to make up the shortfall, and a court can get involved.

Don’t avoid contacting your logbook lender if you can not afford to make the repayments. Most lenders in all lending industries prefer to make a different arrangement than to collect the collateral. If they contact you, do not ignore them, you will lose your car if you don’t communicate effectively with them.

The advantages and disadvantages of logbook loans


  • High acceptance rates especially for those with a poor credit score as no credit check is performed
  • Interest rates are lower than most unsecured quick loans
  • You can borrow large sums of money sometimes up to £50,000 or 70% of your car’s value.
  • Fast application process


  • Chance of repossession. If you can’t repay your loan, you lose your car.
  • Not only are you risking losing your car, but you also pay a considerable high-interest rate on top! This is one of the main reasons why logbook loans are not as popular as payday loans from a direct lender.
  • You have to own a car to get a logbook loan

Alternatives for logbook loans

Decided that logbook loans are not for you? It may be worth considering one of these:

  • Credit Union – If you belong to a credit union, you can get loans for cheaper than other legal lenders. You can also lend money with a credit union and earn interest.
  • Loans for bad credit – Quick Loans Express offers loans to people who have bad credit at the ordinary rate
  • Borrow from family – Although not always ideal, borrowing from family is a cheap way of getting money.
  • Finally, borrowing money is not always an option, especially if you can’t afford to make the repayments. You may want to consider seeking debt advice to explore your options.

Reforms in Logbook Loan Legislation

Citizens Advice has been running a campaign calling for changes in the legislation governing logbook lending since 2014. They have said that the way that the system works means that there’s no incentive for lenders to negotiate affordable repayment plans for those in financial distress.

Following recommendations from the Law Commission in September 2016, the Treasury has agreed to act to close these loopholes in the legislation. Announced in the Queen’s speech in June 2017, the Goods Mortgages Bill will give more protection to consumers and will replace these antiquated Bills of Sales Acts. What are the reforms which will come into effect from 2019?

  • Lenders will have to get a court order before repossessing a vehicle
  • Forbearance must be shown to borrowers who are temporarily unable to pay but have paid off at least a third of the loan
  • Borrowers would be able to end the agreement early by handing over their vehicle to the lender
  • The legislation will protect buyers who bought a second-hand car in good faith with an outstanding loan; while the seller could be prosecuted for fraud

Crystal Evans
Crystal is a Web Content Manager with a passion for helping others. A Marketing Specialist by trade, Crystal’s first job was in the financial sector and she has been adding verve to personal finance ever since! When in high school, Crystal enjoyed creating revision notes and study aids for her peers – making concepts Crystal Clear. She continues this practice in the post-university School of Life – channelling her love of sharing information into blogging about personal finance

The article "Quick and Easy Guide to Logbook Loans" was last modified on

* Warning: Late repayments can cause you serious money problems. For help, go to moneyhelper.org.uk.