{"id":126884,"date":"2019-06-05T07:28:04","date_gmt":"2019-06-05T06:28:04","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=126884"},"modified":"2026-05-11T05:18:52","modified_gmt":"2026-05-11T04:18:52","slug":"logbook-loans","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/car-loans\/logbook-loans","title":{"rendered":"Logbook loans"},"content":{"rendered":"

With logbook loans, you legally sign over ownership of your car for your loan’s duration<\/strong>. You can still use your car, and the lender cannot repossess it without a court order<\/strong> if you fall behind on your repayments.<\/p>

The risk of losing your vehicle plus the high interest rates attached to logbook loans are 2 reasons to look at other borrowing options first.<\/p>

Warning:<\/strong> late repayments can cause you serious money problems. See our debt help<\/a> guides.<\/p><\/div><\/article>

How do logbook loans work?<\/h3>

You could potentially borrow up to \u00a350,000 with a logbook loan from a lender. Although, as you’d expect, this will depend on your vehicle’s value. Lenders typically let you borrow no more than 50% of its official resale value.<\/p>

Once a loan is agreed upon, you’ll be required to hand over the V5 logbook of your vehicle (hence the name). The lender will then have a “bill of sale” registered with the High Court, which makes it lawful for the lender to repossess your car if you fail to keep up with repayments.<\/p>

During the loan term, you’ll make regular repayments, each comprising the interest accrued so far and part of the original sum borrowed.<\/p>

In rare cases, logbook loans can be issued on an “interest-only” basis. This means that during the loans’ term, you’ll only pay back the interest accrued. However, at the end of the loan, your final repayment would comprise interest and<\/em> the full sum originally borrowed.<\/p>

Although interest-only loans typically make for smaller regular instalments, they are almost always significantly more expensive overall because they involve borrowing more for longer.<\/p>

The circumstances under which a lender seeks repossession of a vehicle vary, so check this before agreeing to a logbook loan. If the lender does<\/em> repossess the car, the lender will sell it to recoup any losses.<\/p>

Are logbook loans safe?<\/h3>

When the Financial Conduct Authority (FCA) took charge of regulating this market, it released a report revealing the tactics of several unscrupulous lenders, including a lack of eligibility checking, heavy-handed debt recovery methods and companies seeking to repossess vehicles after just one missed repayment.<\/p>

Underhand tactics have been rarer since then, but under the current rules, these companies can still get away with more than payday lenders, for example.<\/p>

There are no caps on interest charges or late payment fees like there are for payday lenders, and logbook loans don’t fall under the category of high-cost short-term credit.<\/p>

A logbook loan can potentially last over a year, yet it may still have an APR over 400% attached, so debts can be difficult to handle and the threat of losing your car could quickly become very real.<\/p>

How to compare logbook loans<\/h3>

If you do<\/em> plan on taking out a logbook loan, here are some key features to consider when comparing lenders.<\/p>

  • Overall cost.<\/strong> If you only look at one factor, it should probably be this one. As a general rule of thumb, whenever you borrow money, aim for the lowest overall cost while making sure the repayment schedule is comfortably affordable.<\/li>
  • Repayment amounts.<\/strong> The difference between the best and worst rates on the market can be vast, so shop around to keep costs manageable. Generally, the longer the loan term, the lower your monthly repayments will be, but the more interest you’ll pay overall. Choose the shortest possible term that makes your monthly repayments comfortably manageable. If you miss monthly repayments, you’ll be subject to late fees and could ultimately lose your car.<\/li>
  • Fees and charges.<\/strong> The key fee to watch out for is late fees. If these are too high, it could make getting back on track with your repayments really difficult, meaning you’ll be in danger of losing your car.<\/li>
  • When a lender seeks to repossess your car.<\/strong> Most lenders won’t seek to repossess your vehicle until you’ve missed several repayments, but it’s important to know when this process will begin.<\/li><\/ul>