What’s a logbook loan?
Do you own a vehicle and live in England, Wales, or Northern Ireland? If so, a logbook loan could be an option.
With a logbook loan, you apply to borrow money from a lender and use your car, van, or motorcycle as security. This means that if you were to default on your repayments, the lender is within their right to seize and sell your vehicle to recover the money they’ve lost.
If you’re approved for a logbook loan, the lender may ask for a spare key or your vehicle’s logbook, which they’ll keep hold of until the loan has been repaid in full.
You will also need to sign a bill of sale, which is a legally binding document confirming the transfer of ownership for your vehicle.
Can I still use my vehicle during my bad credit logbook loan term?
Yes, you can still use your vehicle while repaying your logbook loan.
It’s crucial to make your repayments in full and on time each month; if you don’t, you risk losing access to your vehicle.
How much money could I get with a bad credit logbook loan?
This will depend on the value of your vehicle and the lender you apply with.
You could be offered a percentage of your vehicle’s value - for example, 50% - or you could apply to borrow the full value. It’s important to never borrow more money than you need or can afford to repay.
What sort of repayment terms are offered with a logbook loan?
Again, this is something that will vary between lenders and could range from a number of months to several years.
If you choose a logbook loan repayment term longer than five years, it’s worth noting that the bill of sale will need to be re-registered.
Could I get a logbook loan if I have bad credit?
Yes, as discussed, you could get a logbook loan, even if you have bad credit. In fact, a logbook loan could be something to think about if you’ve struggled to find a loan due to poor credit in the past.
Before you search for a logbook loan…
There are a number of things that you should ask yourself before you search for a logbook loan.
1. Do I understand the risks involved in taking out a logbook loan?
2. Am I confident that I can afford to make my repayments in full and on time each month?
3. Am I aware that my vehicle could be seized and sold if I do not keep up with my repayments?
4. Logbook loans aren’t the right financial fit for everyone; have I explored any possible logbook loan alternatives that could be available to me?
If you’re ready to search for a logbook loan for bad credit, you can use the firm checker tool to make sure the credit broker or lender you choose is authorised and regulated by the Financial Conduct Authority (FCA).
What should I do if I can’t repay my logbook loan?
If you’ve taken out a logbook loan that you’re struggling to repay, you must contact your lender as soon as possible. It’s important to be open and honest with your lender; there could be things they can suggest, such as temporarily reducing your repayments.
Don’t ignore the issue in the hope that it will go away; defaulting on your logbook loan repayments will hurt your credit score and could mean your vehicle is sold by the lender.
If you’re worried about money, you can seek free, impartial advice from StepChange, MoneyHelper, Citizens Advice, and National Debtline.
Alternatives to logbook loans for bad credit
While a logbook loan could be a possibility if you have bad credit, it’s worth noting that this isn’t necessarily your only borrowing option.
Many lenders offer short-term loans for bad credit without securing the money against your vehicle.
CashLady is a credit broker, and we work with over 30 UK-based direct lenders, several of which specialise in loans for people with bad credit. CashLady could help you search for a bad credit logbook loan alternative between £100 and £10,000, with a repayment term from 3 to 60 months, depending on the amount you apply to borrow.
Please note that a bad credit personal loan could come with a higher rate of interest, which will increase the cost of borrowing.
Search for a logbook loan alternative with CashLady
You can search for a logbook loan alternative with CashLady if you:
- Are over the age of 18;
- Are 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.
Any credit score is considered.
Is CashLady authorised and regulated by the FCA?
Yes, and in addition to this, CashLady only works with lenders who are authorised and regulated by the FCA.
CashLady as a bad credit logbook loan alternative: how does it work?
1. Fill out our online form – this should take no longer than five minutes.
2. We’ll scan our panel of lenders for a suitable loan for you with no impact on your credit score.* This stage will take around 60 seconds.
3. If we’ve been able to match you with a loan, you will be redirected to the lender’s website, where you can decide whether you’d like to make a full application.
4. The lender will carry out a creditworthiness assessment, which will include a hard search or an Open Banking check.
5. If you pass the lender’s checks, you will be officially offered the loan, and the lender will let you know when you can expect the money to be sent.
6. Once received, use the money to cover your emergency expense.
7. Your loan will be repaid in monthly instalments throughout your chosen term. Your monthly repayments will include interest.
Bad credit logbook loan v bad credit unsecured personal loan
The major difference between a bad credit logbook loan and a bad credit personal loan is the fact that you are not required to secure your borrowing against your vehicle.
If you default on your repayments for either a logbook or personal loan, your credit score will be harmed; however, with a logbook loan, you also risk losing access to your vehicle.
In conclusion, a logbook loan could be something to think about if you’re worried that your credit score could stand in your way of being considered for credit. There could also be other options to consider, such as a bad credit, short-term personal loan.
*Searching for a loan with CashLady will not harm your credit score; however, if you’re matched with a loan and choose to make a full application, the lender will carry out a creditworthiness assessment. This will include a hard search or an Open Banking check. A hard search will be visible on your credit file for up to 12 months, and multiple hard searches in a short period of time will harm your credit score.