Logbook Loans Explained

Financial emergencies are unpredictable and, unfortunately, unavoidable for many people. Each year, several UK citizens turn to various options to borrow money online, with logbook loans a popular option in many parts of the country. These are secured loans against your car, which can be a useful and effective way to borrow money.

Drag the slider below to the amount you'd like to borrow
By clicking “Apply Now”, I consent and agree to the Privacy Policy and Terms of Site Use.

Read on to learn and understand what logbook loans are, what they can be used for, how they work, and whether getting a logbook loan is right for you in your circumstances.

What is a Logbook Loan?


A logbook loan allows borrowers to use their car as collateral when borrowing money. Lenders may provide borrowers with a certain amount of money depending on the appraised value of their car.

Essentially, if you take out a logbook loan, the lender then owns your car until you repay the money borrowed alongside any additional fees or interest. You can continue to use your car throughout the loan period, provided the loan is paid on time and in full, as agreed with the lender.

However, if you fail to repay the loan or default, the lender can rightfully repossess your vehicle and sell it to recoup their losses.

How Do Logbook Loans Work?

Depending on the lender and the value of your car, you may be able to borrow between £500 and £50,000. How much you are able to borrow will depend on a variety of factors, such as your credit score and history , as well as what car you have and its current market value.

If you are approved for a logbook loan, you will surrender your vehicle’s logbook or vehicle registration document. These documents show that you are the registered owner of the vehicle. In exchange for these documents, you will receive your loan.

If you obtain a logbook loan, you will transfer your car's ownership momentarily to the lender until you repay the loan. Therefore, applying for a logbook loan is important only if you can fully repay the loan. Missed payments will ultimately lead to your car being completely repossessed.

Who Can Get a Logbook Loan in the UK?

Anyone 18 years or older can request a logbook loan in the UK. You will also need to be the registered vehicle owner you use as collateral. In addition, people will need an active bank account, and repayments will automatically be deducted. The lender will conduct a credit check to determine eligibility for a logbook loan.

While good credit may improve your qualifications, a bad score may not prevent you from submitting a request. Some lenders may be willing to work with damaged credit applicants. These lenders may consider your income and the collateral when determining eligibility.

How Can I Get a Logbook Loan?

You can get a logbook loan in person in the UK or submit a request online on a direct lender’s website.

Keep in mind that not all websites offering logbook loans are legit, so be sure to research the company before you apply. In addition, you will need to check that you meet the minimum eligibility criteria before applying.

Additionally, prepare the necessary documents in advance to save you additional time. For example, many lenders require personal and financial information, such as identity documents, paystubs, and banking info. However, some lenders may ask for additional information.

What Can I Use a Logbook Loan For?

Like any other short-term personal loan, a logbook loan can be used for various emergencies. For example, logbook loans can be used to address home repairs or medical bills.

However, logbook loans should not be used to pay for any ongoing payments you may have, such as rent, mortgages, utility bills, and so on.

What Vehicles Can Be Used for a Logbook Loan?

The type of collateral you use includes:

  • Car

  • Van

  • Motorcycle

  • Caravan

  • Boat

Regardless of the type of vehicle you put up as collateral, ensure you are the owner and have the necessary documentation.

What Are the Pros and Cons Of Logbook Loans?

Before getting a logbook loan, you should consider whether this is the right type of loan for you. There are many alternative loan options and other ways to borrow money – such as from family or friends. However, keep reading if you’d like to find out the common advantages and disadvantages of logbook loans.

Advantages of Logbook Loans

There are many advantages to using a logbook loan. For instance:

  • Fast Applications: Many UK companies offer fast application processes, which may be necessary during financial emergencies.

  • Poor Credit: Some lenders may be willing to work with poor credit applicants. They may consider your collateral and income when determining eligibility.

  • Higher Loan Amounts: Based on the appraised value of your vehicle, you may be approved for a higher loan amount if you are eligible.

Disadvantages of Logbook Loans

As with everything in life, there are always some drawbacks. When applying for a logbook loan, be wary of the following:

  • Higher Interest Rates: When obtaining a logbook loan, you may find higher interest rates. Check the interest rates before applying for and accepting the loan.

  • Potential Debt Trap: Avoiding or missing repayments leads to further ongoing repayments and additional fees. This can lead to some borrowers falling into more debt.

  • Risk Losing Your Vehicle: If you do not repay the loan, you will likely have your car repossessed.

  • Additional Fees: Be sure to read the lender's policies. In cases where repayments were missed, you may be charged late penalty fees.

Are Logbook Loans Worth It?

There is no right or wrong answer to this question; it all depends on your emergency and personal finances. Logbook loans may help you address financial crises, such as medical bills or home repairs. But first, make sure you can repay the loan, as the collateral you use to secure a logbook loan can be repossessed if you fail to make repayments.

Author Maggie Clarke
Maggie Clarke Content Ops Lead
Maggie leads the content operations team at Doddler.co.uk. She is an expert on personal finance, by way of a lifetime of gathering practical knowledge on what to not do with your pocketbook. When not blogging about money, Maggie can be found rambling through the roughest terrains. She considers herself charming yet troublesome and would love to meet you someday, just not today.
This website uses cookies in order to give you the best experience while using our service. By continuing, you agree to our Cookie Policy.