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Car finance ›
What is a logbook loan?
Chris Lambert, Product Development Manager, Wednesday, 5 June 2024
Updated: Wednesday, 5 June 2024
Updated: Wednesday, 5 June 2024
Logbook loans are secured loans that allow you to borrow money against the value of your car. They aren’t a type of car finance agreement, so you wouldn’t apply for one if you were looking to buy a new vehicle. Instead, logbook loans are a way of borrowing money for other purchases by using your car as security.
Logbook loans are secured loans that allow you to borrow money against the value of your car. They aren’t a type of car finance agreement, so you wouldn’t apply for one if you were looking to buy a new vehicle. Instead, logbook loans are a way of borrowing money for other purchases by using your car as security.
We could help you get car finance, but not logbook loans
At Moneybarn, we don’t offer logbook loans. We are one of the UK’s leading specialist lenders of car finance for people with bad credit or who have been rejected by lenders in the past.
Representative 30.7% APR.
At Moneybarn, we don’t offer logbook loans. We are one of the UK’s leading specialist lenders of car finance for people with bad credit or who have been rejected by lenders in the past.
Representative 30.7% APR.
How do logbook loans work?
A logbook loan is a type of secured loan. This is where the money you borrow is secured against the value of an asset – in this case, your car.
Here are some of the key features of logbook loans:
How do logbook loans work?
A logbook loan is a type of secured loan. This is where the money you borrow is secured against the value of an asset – in this case, your car.
Here are some of the key features of logbook loans:
The lender will be the car’s legal owner for the full repayment period. You will hand over the V5C registration document (the logbook) to the lender.
You will be the registered keeper of the vehicle while you repay your loan, meaning you can drive it but not sell or modify it.
Interest rates can be very high, typically 400% or higher, making logbook loans expensive compared to other types of credit.
Some lenders may ask you to make weekly payments, whereas other loan types may require monthly payments.
The amount you can borrow will depend on the lender’s criteria. Some will only offer 50% of your car’s market value.
If you don’t keep up with your repayments, the lender can repossess and sell your car to recover your debt.
The lender will be the car’s legal owner for the full repayment period. You will hand over the V5C registration document (the logbook) to the lender.
You will be the registered keeper of the vehicle while you repay your loan, meaning you can drive it but not sell or modify it.
Interest rates can be very high, typically 400% or higher, making logbook loans expensive compared to other types of credit.
Some lenders may ask you to make weekly payments, whereas other loan types may require monthly payments.
The amount you can borrow will depend on the lender’s criteria. Some will only offer 50% of your car’s market value.
If you don’t keep up with your repayments, the lender can repossess and sell your car to recover your debt.
All lenders have their own criteria, terms, and conditions, so it’s important to check the details carefully before applying for any type of loan.
How long do logbook loans last?
Logbook loans usually last between 18 and 36 months, but you can choose to pay them off earlier (though there may be a fee for doing so).
While longer terms may be available, you would pay back a lot more over this period due to the extremely high rates of interest charged.
What are the pros and cons of a logbook loan?
All lenders have their own criteria, terms, and conditions, so it’s important to check the details carefully before applying for any type of loan.
How long do logbook loans last?
Logbook loans usually last between 18 and 36 months, but you can choose to pay them off earlier (though there may be a fee for doing so).
While longer terms may be available, you would pay back a lot more over this period due to the extremely high rates of interest charged.
What are the pros and cons of a logbook loan?
Flexible terms: A logbook loan lets you borrow money and pay it back over a time that suits you.
High interest rates: Unlike other types of credit, like personal loans, logbook loans have typical APRs of 400% and higher.
Basic requirements: Because you may not need to pass a credit check, logbook loan lenders may only have simple criteria. However, checks should still be taken to ensure you can afford the repayments.
Your car may be repossessed: Because the logbook loan is secured against your car, if you can’t repay the loan, your vehicle may be repossessed.
Easy application processes: With fewer checks compared to mainstream lenders and a shorter process, applying for a logbook loan can be straightforward even with bad credit.
Your must get permission if your car is financed: You’ll need permission from the car finance company before applying for any logbook loans.
Flexible terms: A logbook loan lets you borrow money and pay it back over a time that suits you.
Basic requirements: Because you may not need to pass a credit check, logbook loan lenders may only have simple criteria. However, checks should still be taken to ensure you can afford the repayments.
Easy application processes: With fewer checks compared to mainstream lenders and a shorter process, applying for a logbook loan can be straightforward even with bad credit.
High interest rates: Unlike other types of credit, like personal loans, logbook loans have typical APRs of 400% and higher.
Your car may be repossessed: Because the logbook loan is secured against your car, if you can’t repay the loan, your vehicle may be repossessed.
Your must get permission if your car is financed: You’ll need permission from the car finance company before applying for any logbook loans.
How much can you borrow with a logbook loan?
Because the loan is secured against the value of your vehicle, you would borrow a percentage of what it is worth. This is typically 70% of the car’s value, up to £50,000, but loans are usually between £400 and £5,000.
The exact amount you can borrow is based on the logbook loan company’s inspection and valuation of the vehicle.
How much does a logbook loan cost?
With a logbook loan with an APR of 400%, if you borrowed £1,500 and paid £55 a week for 18 months, you’d repay over £4,250 in total. That’s around £2,750 in interest to borrow £1,500.
How much can you borrow with a logbook loan?
Because the loan is secured against the value of your vehicle, you would borrow a percentage of what it is worth. This is typically 70% of the car’s value, up to £50,000, but loans are usually between £400 and £5,000.
The exact amount you can borrow is based on the logbook loan company’s inspection and valuation of the vehicle.
How much does a logbook loan cost?
With a logbook loan with an APR of 400%, if you borrowed £1,500 and paid £55 a week for 18 months, you’d repay over £4,250 in total. That’s around £2,750 in interest to borrow £1,500.
What happens if you miss payments on a logbook loan?
If you miss multiple payments on your logbook loan, your vehicle may be repossessed and sold to get back the money you owe.
Because you will have handed ownership over to the logbook loan company, they do not need to go to court to repossess your vehicle.
However, before this happens, you must be sent a default notice. This gives you 14 days to make any missed payments and avoid losing your vehicle.
What happens if you miss payments on a logbook loan?
If you miss multiple payments on your logbook loan, your vehicle may be repossessed and sold to get back the money you owe.
Because you will have handed ownership over to the logbook loan company, they do not need to go to court to repossess your vehicle.
However, before this happens, you must be sent a default notice. This gives you 14 days to make any missed payments and avoid losing your vehicle.
Can you get a logbook loan with bad credit?
Logbook loans are designed for people with poor credit or who have been refused credit by other lenders.
Some logbook lenders do not do a credit check at all, which makes them more appealing to people with low credit scores.
If you have a bad credit history, finance companies may consider you a higher risk. This is why logbook loan lenders charge such high interest rates and secure the loan agreement against your vehicle.
What documents do you need to get a logbook loan?
To take out a logbook loan, you may need to provide the following documents:
- Your vehicle’s logbook (V5C)
- Proof of insurance
- Proof of identity (your driving licence or passport)
- Proof of income (payslips or bank statements)
- Vehicle service history and the most recent MOT certificate
We can’t speak for other finance companies, so it’s important to know that your eligibility for a logbook loan varies from lender to lender. We do not offer logbook loans at Moneybarn.
Are logbook loans safe?
Logbook loans are secured against your vehicle, and to take one out, you’ll have to transfer ownership of your vehicle to the lender. Your car could be repossessed if you fail to keep up with the repayments.
Most logbook loans have high interest rates (typically 400% or more), meaning you pay back far more than you borrow.
Because a personal loan agreement is signed as part of the logbook loan, they are regulated by the Consumer Credit Act. You should understand the terms and conditions before making applications for any type of credit. This might include checking if the logbook lender is a member of the Consumer Credit Trade Association.
Can you take out a logbook loan on a car with outstanding finance?
Can you get a logbook loan with bad credit?
Logbook loans are designed for people with poor credit or who have been refused credit by other lenders.
Some logbook lenders do not do a credit check at all, which makes them more appealing to people with low credit scores.
If you have a bad credit history, finance companies may consider you a higher risk. This is why logbook loan lenders charge such high interest rates and secure the loan agreement against your vehicle.
What documents do you need to get a logbook loan?
To take out a logbook loan, you may need to provide the following documents:
- Your vehicle’s logbook (V5C)
- Proof of insurance
- Proof of identity (your driving licence or passport)
- Proof of income (payslips or bank statements)
- Vehicle service history and the most recent MOT certificate
We can’t speak for other finance companies, so it’s important to know that your eligibility for a logbook loan varies from lender to lender. We do not offer logbook loans at Moneybarn.
Are logbook loans safe?
Logbook loans are secured against your vehicle, and to take one out, you’ll have to transfer ownership of your vehicle to the lender. Your car could be repossessed if you fail to keep up with the repayments.
Most logbook loans have high interest rates (typically 400% or more), meaning you pay back far more than you borrow.
Because a personal loan agreement is signed as part of the logbook loan, they are regulated by the Consumer Credit Act. You should understand the terms and conditions before making applications for any type of credit. This might include checking if the logbook lender is a member of the Consumer Credit Trade Association.
Can you take out a logbook loan on a car with outstanding finance?
You must have the permission of the finance company
Logbook lenders may be less likely to offer you a loan if your car is still on finance.
If your finance agreement ends soon, you only owe a small amount on your car and will own it at the end of the contract. They may consider your application, but you will need permission from your finance provider before making any applications for logbook loans.
You must have the permission of the finance company
Logbook lenders may be less likely to offer you a loan if your car is still on finance.
If your finance agreement ends soon, you only owe a small amount on your car and will own it at the end of the contract. They may consider your application, but you will need permission from your finance provider before making any applications for logbook loans.
What are the alternatives to logbook loans?
If you’re looking to borrow money, logbook finance can be tempting, but before you make a choice, it’s handy to know some of the other options that are available:
What are the alternatives to logbook loans?
If you’re looking to borrow money, logbook finance can be tempting, but before you make a choice, it’s handy to know some of the other options that are available:
Money transfer credit cards
If you want to avoid paying large interest rates, some money transfer credit cards offer 0% interest. This will depend on your credit score and credit history, but repayments will likely be cheaper than a logbook loan.
Guarantor or joint loans
Asking a friend or family member to guarantee a loan can help you access lower interest rates. The guarantor will need to pay back your loan if you can’t, so you both need to understand the terms and conditions before applying.
Credit union loan services
Credit unions are community savings and loan schemes that are designed to help people on low incomes access credit. You may be able to get a credit union loan if you have poor credit or have been refused by mainstream lenders.
Current account overdraft
Most bank accounts come with an overdraft that lets you borrow a set amount of money on a short-term basis. The interest rate you’re charged will depend on your circumstances, so you will need to contact your bank to talk about this.
Vehicle equity release
This is where you sell your car to a lender and then buy it back under a Hire Purchase or Personal Contract Purchase plan. Usually, this is only available if you have classic or vintage car or a new car that has a high value.
Money transfer credit cards
If you want to avoid paying large interest rates, some money transfer credit cards offer 0% interest. This will depend on your credit score and credit history, but repayments will likely be cheaper than a logbook loan.
Guarantor or joint loans
Asking a friend or family member to guarantee a loan can help you access lower interest rates. The guarantor will need to pay back your loan if you can’t, so you both need to understand the terms and conditions before applying.
Credit union loan services
Credit unions are community savings and loan schemes that are designed to help people on low incomes access credit. You may be able to get a credit union loan if you have poor credit or have been refused by mainstream lenders.
Current account overdraft
Most bank accounts come with an overdraft that lets you borrow a set amount of money on a short-term basis. The interest rate you’re charged will depend on your circumstances, so you will need to contact your bank to talk about this.
Vehicle equity release
This is where you sell your car to a lender and then buy it back under a Hire Purchase or Personal Contract Purchase plan. Usually, this is only available if you have classic or vintage car or a new car that has a high value.
What's the difference between a logbook loan and car finance?
The key difference between car finance and logbook loans is the purpose of the loan. Car finance is used to buy a vehicle, while a logbook loan is when you borrow against the value of the car to get some money.
The other differences between logbook loans and car finance, like Conditional Sale agreements, are:
- With a logbook loan, you temporarily change the legal ownership to the lender. With a car finance deal, you only become the legal owner once you have made the final payment.
- Logbook loans allow you to use your vehicle as you normally would, but some car finance plans, like PCP deals, may have mileage limits.
- Logbook loans have extremely high interest rates.
- The car finance industry is regulated more strictly than the logbook loan industry.
Are you looking for car finance?
What's the difference between a logbook loan and car finance?
The key difference between car finance and logbook loans is the purpose of the loan. Car finance is used to buy a vehicle, while a logbook loan is when you borrow against the value of the car to get some money.
The other differences between logbook loans and car finance, like Conditional Sale agreements, are:
- With a logbook loan, you temporarily change the legal ownership to the lender. With a car finance deal, you only become the legal owner once you have made the final payment.
- Logbook loans allow you to use your vehicle as you normally would, but some car finance plans, like PCP deals, may have mileage limits.
- Logbook loans have extremely high interest rates.
- The car finance industry is regulated more strictly than the logbook loan industry.
Are you looking for car finance?
If you’re looking for car, motorbike, or van finance and have been rejected by other lenders because you have a poor credit history, we could help.
At Moneybarn, we’ve been helping people secure car finance for over 30 years, and we specialise in bad credit car finance.
How our car finance works
So, if you’ve missed payments in the past, are self-employed, have been discharged from bankruptcy, or have less-than-perfect credit, we could help.
Use our car finance calculator to see what your agreement might look like, depending on how much you want to borrow.
When you’re ready, you can get a quote online in less than 5 minutes. We only use a soft check when you do this, and won’t use a hard check until you’ve found your dream car and contracts are drawn up for you to sign.
Representative 30.7% APR.
If you’re looking for car, motorbike, or van finance and have been rejected by other lenders because you have a poor credit history, we could help.
At Moneybarn, we’ve been helping people secure car finance for over 30 years, and we specialise in bad credit car finance.
So, if you’ve missed payments in the past, are self-employed, have been discharged from bankruptcy, or have less-than-perfect credit, we could help.
Use our car finance calculator to see what your agreement might look like, depending on how much you want to borrow.
When you’re ready, you can get a quote online in less than 5 minutes. We only use a soft check when you do this, and won’t use a hard check until you’ve found your dream car and contracts are drawn up for you to sign.
Representative 30.7% APR.
How our car finance works
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
