Logbook Loans

A logbook loan is a common type of secured loan that is designed for those with bad credit who are in need of a financial solution.

This loan offers a convenient method of accessing finance, letting individuals who are looking to borrow money do so by transferring ownership of a car, motorcycle or van that they own to a lender as loan security. They can borrow funds up to the value of the car, with ownership being returned to them once the loan has been paid off in full.

The car should meet certain criteria before it can be offered up for a logbook loan. Although these criteria can vary depending on the lender, typically it should be:

At least worth £1000
Less than 10 years old
Free from finance
If not free from finance, at least near the end of the finance agreement

You will need to provide your logbook or V5 registration as part of this loan process, to prove that you are the vehicle owner. Some personal details you will need to provide are:

  • Your address
  • Your income and other relevant financial information
  • An outline of your regular expenditure

The lender can seize the vehicle if the borrower defaults, enabling them to satisfy the remainder of the debt with the proceeds of sale for the vehicle.

Logbook Loans are slightly different in Scotland compared to other parts of the UK. In Scotland, a logbook loan is required legally to be offered not as a bill of sale, but rather as a hire purchase agreement. A hire purchase agreement means that ownership of the vehicle is taken over by the lender – as with a bill of sale – but differs in that the borrower signs the hire purchase agreement, agreeing to repay the loan over a certain time-frame.

Scotland uses hire purchase agreements for logbook loans, which means that your credit report will reflect details of the loan. A Scottish logbook loan and an English logbook loan have no material difference, but since borrowers in Scotland have their applications for a logbook loan reported to the Scottish credit reference agencies, they should be careful not to submit too many logbook loan application as it could lead to a note being added to your credit rating that makes note of your applications and refusals, potentially affecting your credit rating.


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