What is a logbook loan?
A logbook loan could offer a way to borrow money, using your vehicle as security, otherwise known as collateral. Because of this, the value of your car must be equal to or greater than the amount of money you apply to borrow. If you default on your loan repayments, the lender is within their right to seize and sell your car to cover the cost.
You might be asked to provide an up-to-date valuation of your vehicle as part of your application.
During the repayment term, you’ll still have full access to your car, although the lender may ask to hold onto the physical logbook or a spare key.
Will the age of my car affect my chances of being accepted for a logbook loan?
It could do – but this isn’t always the case. As discussed, it could still be possible to be considered for a logbook loan with an older car.
Generally, older cars are subject to more wear and tear and could be worth less than newer vehicles.
However, not all older cars are worth less than younger ones, and some logbook loan providers could consider your vehicle, whatever its age, as long as it’s in reasonable condition.
Older cars in excellent condition or with fewer miles on the clock may have a higher trade value, and classic or sports cars could be reviewed on a case-by-case basis.
The trade value of your car helps to determine how much money you could borrow. The lender needs to be sure that the amount of money you borrow is covered by the value of the car if they must repossess and sell it.
Should you take out a logbook loan on your older car?
The main consideration when thinking about searching for a logbook loan is whether you can afford it. You should never apply for any type of loan unless you’re confident that you can make your repayments on time each month. In addition to this, you should never apply to borrow more money than you need.
It’s crucial to understand how logbook loans work and the risks involved. Defaulting on a logbook loan repayment could result in the lender selling your car to recoup their losses.
Where to find logbook loans for older cars
If you’ve done your research and are confident that a logbook loan is an affordable type of borrowing for you, you might wonder where to start searching for a suitable option.
Logbook loan providers can be found online.
Before sharing your personal and financial details with a company, please make sure that they appear on the Financial Conduct Authority (FCA) register. You can do this by using the FCA Firm Checker tool.
Who can apply for a logbook loan for an older car?
Before you search for a logbook loan for an older car, you’ll need to make sure you meet the lender’s eligibility criteria. This will vary from lender to lender, but generally, you could make an application if you:
- Live in England, Wales or Northern Ireland;
- Are over the age of 18; and
- Are the legal owner of a taxed and insured vehicle with an up-to-date MOT. Your vehicle should also be either free or almost free from finance.
Logbook loans are not available in Scotland.
Could I get a logbook loan for an older car through CashLady?
CashLady is a credit broker, and we don’t work with any lenders of logbook loans. However, if you need a short-term loan between £100 and £10,000, we could help you search for a suitable logbook loan alternative.
To search for a short-term loan with CashLady, you must:
- Be over the age of 18;
- Be a UK resident;
- Have a UK bank account and a valid debit card; and
- Have a regular source of income paid into your bank account.
The lenders on our panel make it possible to search for a loan with a repayment term from 3 to 60 months, depending on the amount of money you apply to borrow.
Bad credit logbook loan alternative
You might have thought about searching for a logbook loan if you’re concerned that a history of bad credit could hold you back from applying with a mainstream lender.
Please note that even with bad credit, there could still be other types of loans for you to consider.
CashLady works with several lenders who specialise in short-term loans for bad credit. A bad credit loan could come with a higher rate of interest, which is something you should bear in mind when working out how repaying a loan will affect your monthly budget.
What should I do if I’m struggling with money?
If you’re experiencing financial difficulties, it could be a good idea to take a step back before you apply for more credit. Borrowing more money could result in a spiral of debt. If you’d like to talk to someone about debt worries or money concerns in general, please know that you can access free support and advice through any of the following charities and organisations: StepChange, MoneyHelper, Citizens Advice, and National Debtline.