What are Logbook Loans?

A Logbook Loan is a personal loan (normally for customers with a poor credit history) that is secured against a customer’s motor vehicle through a Bill of Sale.

A Bill of Sale gives the Lender security over a customer’s vehicle. In fact, until a customer repays their loan in full the lender is technically the legal owner of the vehicle. However, the customers may still continue to drive the vehicle as normal. Once the loan has been repaid ownership of the vehicle reverts back to the customer.

If a customer defaults on their payments, then the lender may take possession of the vehicle.The sale of the vehicle will be expected to cover the outstanding loan balance and the lender is required to try to sell the vehicle for the best possible price. However, if the sale proceeds are lower than the outstanding balance of the loan (to include any legal default or repossession fees or charges) then the customer will still be liable to repay this balance.

Logbook lenders offer customer access to cash quickly. Loan agreements can be processed within the same day that the application is made. Funds can normally be transferred to the customer’s account within a few to 24 hours of being approved.

As Logbook Loans are designed for customers with a poor credit history, interest rates tend to be higher than many other lenders’; however they are charged at a fixed rate, thus allowing customers to budget each month. Repayment terms tend to range from 6 months to 36 months.

Warning: Late repayment can cause you serious money problems. For help, go to www.moneyadviceservice.org.uk