Pros and Cons of Logbook Loans

There is no perfect personal loan. Each type and deal you stumble upon has its set of pros and cons. But one product that have been hounded with a lot of controversies over the years is logbook loans. Logbook loans, as the name suggests, are personal loans secured against your vehicle. It is mainly offered for people who have struggled to get a loan elsewhere because of bad credit history.

Some experts vehemently discourage borrowers to resort to the short term financing. Others advise borrowers to consider it only as a last option. Either way, as borrower, it is your responsibility to investigate. If you’re planning to take out a logbook loan, start by considering the pros and cons. Weigh them against each other and then decide whether it’s right for you or not.

The Pros

Despite the controversies, logbook loans continue to thrive in the UK market for the following reasons:

Basic requirements

Though a secured loan, logbook loans require only the most basic of requirements. To be eligible for the loan, you must be of legal age, a UK resident and a vehicle owner. It doesn’t even matter if working part-time, full time or is self-employed. As long as you can provide proof of steady income, you are welcome to avail the loan.

Available online

Logbook loans are also readily available online which means you can complete the preliminary application from the comforts of home. Your lender will call you after assessment and let you know whether you want to pay the office a visit or send a representative over to your address to finalize the application.

Fast processing

When it comes to processing time, more and more lenders are now offering same day approval for your loan application. If you need the cash quick, you can count on logbook loans to save the day.

Flexible terms

Because the loan is secured, you can enjoy flexible loan amounts and repayment terms. In general, you can borrow from £500 up to £50,000 or up to 70% of your car’s official trade value. You can repay the loan in a span of 12 months up to 36 months on a weekly or monthly basis whichever is more comfortable for your situation.

No credit check

Best of all, logbook loan lenders do not run any credit checks on their borrowers. This means anyone with a poor credit history is welcome to apply for the loan. As long as you meet the requirements, you can almost always guarantee approval.

The Cons

While advantageous in a number of ways, logbook loans are not without its disadvantages. The top two include:

High cost

Logbook loans are known to have an average rep APR of 400%, a steep price to pay for interest rates and related charges. This is the lender’s way to compensate for the high risks they are taking offering loan deals for people with bad credit.


The biggest risk with logbook loan is the possibility of vehicle repossession. In the event that you can repay the loan, your lender can repossess then sell your car to cover for your outstanding balance.