How Logbook Loans Work


Logbook loans are very costly. But they are also easily accessible making the financial product a handy solution for immediate financial needs. Before you go ahead and secure a loan against your car, however, it pays to know how the financial product really works.

To be eligible for a logbook loan, you only need to meet the most basic requirements which include the following:

  • You must be of legal age (at least 18 years old).
  • You must be a UK resident.
  • You must provide proof of steady income, proof of identification and billing address.
  • You must be a car owner.
  • You must provide necessary documents which include your car’s logbook document, MOT certificate and insurance details.

When you’re approved for a logbook loan, your lender will have to keep your car’s V5 document which essentially means you handing over temporary ownership of the vehicle to your lender. This part is a bit tricky however. If you commit to repay your loan on time and consistently each month until it’s paid off, you shouldn’t have problems.


If you fail to keep up with your monthly repayments, on one hand, this is where all the problems may arise. Since temporary ownership belongs to your lender, they have the right to repossess your vehicle if they deem it reasonable. With the bill of sale to back them up, the lender can eventually sell your car to cover for your outstanding balance. If the resale price does not cover everything, you will still be obliged to pay the rest of the loan balance.


Before you worry about repossession, remember that logbook loan lenders are more flexible with their terms compared with high street lenders. This means new payment arrangements can be made if you think it necessary. Just make sure to speak with your lender as soon as you realize that the monthly repayments are something you can no longer handle financially.

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