Debt – Using Logbook Loans for Personal Finance


In this article we look at the usefulness of logbook loans and highlight how they work. This will assist in making informed decisions on whether to use this type of personal finance as an alternative to the more traditional types of finance available such as bank loans or credit cards.

Mechanics of the Logbook Loans

Logbook loans are loans which are guaranteed on the borrower’s car. They are usually available for loans between 500 and 10,000, although the amount of credit available may increase if the car is particularly valuable. The loan granted is usually somewhere between 65% and 75% of the estimated value of the vehicle on which the loan is secured. The loan is usually given without having to check an individual’s credit rating as the loan is secured on the value of the car. If the loan is not repaid within the terms of the loan agreement, the car can potential be removed by the loan company and sold by them. The proceeds would then initially be used to repay the loan, with any surplus being repaid to the borrower.

How to get a Logbook Loan

When a consumer decides to take out a logbook loan, an application form is completed (usually online) and submitted to the logbook loan company. After an initial check by an underwriter, someone from the company will usually visit your home to inspect the vehicle on which the loan is to be secured, check that the vehicle documents are in order, take the original of the V5 (care registration) document (this is used as security by the loan company) and complete the necessary paperwork. Once this paperwork has been processed, if all is in order and the company is satisfied that the car meets the criteria set out below, the company will advance the loan amount to your designated bank account, this usually happens very quickly for example within a few working days in most cases.

The car must be held in the applicants name and must not have any outstanding loans or other credit agreements outstanding against it. Logbook loans online will reject any application where this is not the case.

The car should be in roadworthy condition and usually less than ten years old (unless it is a prestige or vintage model). It should also have a valid MOT certificate and be currently insured.
Whilst an individuals credit rating is not examined, the applicant should be able to demonstrate an ability to repay the loan, for example by showing proof of a regular income.


Logbook loans online are a very useful way to access a relatively large amount of credit very simply and quickly, if the borrower has struggled to obtain finance in other ways because of poor credit ratings. As long as the borrower owns a roadworthy car, a loan will usually be granted. Consumers should always ensure that any logbook lender is a member of the Consumer Credit Trade Association and is registered with the Financial Conduct Authority.

Additional Information

You may also like to read this post regarding Logbook Loans


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