Logbook Loan Debt

Logbook Loan Debt

Logbook Loan Debt - Guidance

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What Are Logbook Loans?

A logbook loan involves borrowing a sum of money secured against your car. By signing up to a logbook loan, you are essentially passing the ownership of your car to the lender in exchange for money. However, you are still allowed to use the car. 

The amount of money you will be able to borrow is based upon the value of the car, but some lenders will only agree to give you a percentage of the value. 


This is a high-risk method of borrowing and can quickly go very wrong if you cannot make your repayments. 

How Does A Logbook Loan Agreement Work? 

Every car in the UK has a registration document called a V5C which allows the government to know who owns it and if it is still in use. You cannot legally own a functional car without one since it also tells the government who is liable to pay its road tax. This document is also often referred to as the logbook. 


When signing up for a logbook loan, it is this document that is passed to the lender, essentially handing them the legal rights the vehicle. You will also be expected to complete a credit agreement and a bill of sale.  


If you pay the loan back successfully, then you will be given the logbook back. 

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What Can Go Wrong With a Logbook Loan? 

Since logbook loans are considered ‘high-risk’, they are often entered into by people who are already struggling to get credit and perhaps already have other money issues. This means that it can be common for people to struggle to pay back a logbook loan. In fact, people will often reach for this kind of credit to pay back other credit agreements to ‘keep the wolf from the door’.  

The interest rates on this kind of loan are extremely high, sometimes as much as 400% and it is common for these companies to not run a credit check. 

What Happens If I Do Not Keep Up with My Repayments? 

As with most forms of debt, the consequences for not making repayments become more severe over time.


In the first instance, the lender will send you a default notice giving you 14 days to pay what you owe. You may receive several of these if you do not respond. 

Logbook Loans Repossession

If you continue to ignore the debt, then logbook loan companies will send bailiffs to repossess your car, often, they will not even need to seek permission from the courts.  They will sell your car and use that money to pay off your loan.


However, if the money they receive does not pay the loan in full, then you may still owe them money


It is also worth noting, since you handed over the logbook, you are not able to sell the car yourself and use the money to pay your debt.  

How Can I Get Help With My Logbook Loan Debts? 

If you are simply looking to borrow some money and your credit score is healthy, then there are much cheaper and safer ways to borrow e.g. a personal loan.


However if you are already struggling with your finances or debts and your credit score is already poor. Now is the time to put a stop to that snowball effect


Remember, you don’t necessarily need to deal with all of your debts to improve your situation. 


If you have a combination of secured and unsecured debts and live in England, Wales or Northern Ireland, then applying for an IVA may reduce your monthly outgoings enough to cope with your secured debt repayments. 


If you live in Scotland then a Trust Deed is your equivalent solution. 


If you only have secured debts and live in England, Wales or Northern Ireland, then the following solutions may work for you:


If you live in Scotland, then you could apply for:


Logbook Loan Debt FAQs

Logbook Loan Debt
Logbook Loan Debt FAQs

Logbook Loan Can They Take My Car?

If you have taken out a logbook loan, then in effect you have already handed the legal ownership of your car over to the lender. They are agreeing to allow you to continue to use it.

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