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Log Book Loans

Tuesday, 28th April 2009


Log Book Loans & What is a Log Book Loan


BBC Inside Out London (watch)

You can watch debt finance specialist Mike Thomas as he investigates the rise in logbook loans and exposes how unscrupulous car sellers are shifting their debts to unsuspecting buyers.  Watch here - BBC Inside Out - London


Log Book Loan Self-Help Guide

In connection with Mike Thomas appearing on 'BBC Inside Out London' and then followed by 'My Worst Deal' we launched our bespoke Log Book Loan Self-help Guide.

The guide is designed to help you with arrears, repossession and excess charges. It also informs you of your consumer rights plus lots more.

Take me to the Log Book Loan Self-help Guide.


What is a Log Book Loan?

A 'Log Book' Loan is a loan secured against your vehicle, (a car or a motorbike). Having a log book loan means that you will lose your vehicle if you default on the repayments to the loan company.

How much can I borrow with a Log Book Loan?

Loans range from £500 to £50,000 according to the value of the vehicle in question.

Will I have to undergo a credit check for a Log Book Loan?

No, this type of loan is usually taken up by those whose record denies them access to the more usual forms of credit. Basically they are available to anyone irrespective of their credit history.

How do I qualify for a Log Book Loan?

  • Be aged 18 or over
  • Be the legal owner of the vehicle
  • Hold a current tax disc, certificate of insurance and a valid MOT for the vehicle
  • Have no finance outstanding on the vehicle
  • Demonstrate you can repay the loan

Who keeps the Log Book?

The lender keeps it for security in case you do not pay.

How do I make payments back on a Log Book Loan?

Generally the standard term for a Log Book loan is 58 weeks, although it may be possible to pay it off earlier. Because the APR can be high it is advisable to pay it off as quickly as possible.

What is Representative APR on a Log Book Loan?

From the 1st February 2011 any business that offers loans or products on credit has to change the way they show their APR. It is no longer described as a 'Typical APR' but as a 'Representative APR'.

This means that 2 things have changed;

  • Previously the lender had to detail the typical APR of a loan that applied customers that would have replied to that advert, this has now been reduced to 51% of customers
  • Lenders now have to include the rate of interest in their Representative APR example.

What does APR stand for?

APR stands for Annual Percentage Rate; it includes such things as

  • the interest rate you must pay;
  • how you repay the loan; i.e. the length of the loan agreement (or term); frequency and timing of instalment payments and amount of each payment;
  • certain fees associated with the loan;

Lenders must tell you what their Representative APR is before you sign an agreement and it will vary from lender to lender.

What are the advantages of a Log Book Loan?

  • No credit check
  • Available to those with an impaired credit history
  • Funds can be available immediately according to which firm you use
  • No restriction on what the money can be used for

What are the disadvantages of Log Book Loans?

  • A very high APR
  • The debt quickly escalates out of control if you start to fall behind with the payments
  • You could lose your car if you fail to keep up the payments on the loan

Do I have to sign anything or just hand over the log book?

You will have to sign Bill of Sale along with a credit agreement. By signing the bill of sale you temporarily hand over ownership of the vehicle to the loan company giving them the right to repossess the vehicle in the event of you defaulting on the payments.

How do I get paid by a Log Book lender?

Usually by cheque which will take several days to clear, some firms offer a quick cash service but can charge as much as 4% in fees for this option.

How do I know I how much I can borrow from a Log Book lender against the vehicle?

The firm will usually ask you to take the vehicle to an agent in a location of your choice together with some documentation.

When you meet with the Loan Officer/Agent, they will carry out a quick inspection of the vehicle and confirm the vehicle valuation provided over the telephone. Following this an offer will be made.

If you take up a Log Book loan it is important to remember that whilst you keep your car, the lender will keep your log book until you have repaid the loan.

What can I do if I can't pay my Log Book Loan?

We have a Log Book Loan Self-help Guide if you are experiencing problems with payments, are in arrears or being threatened with repossession.

We cover the following points;

  1. Log Book Loans new code of practice
  2. OFT Debt Collection Guidelines
  3. Bill of Sale (BoS)
  4. Time Orders (arrears only or on the whole agreement)
  5. Your options according to your problem
  6. Purchased a used car with a Log Book Loan attached
  7. Where to get help.





For no nonsense advice just submit the short form and Mike or one of his team will get back to you.

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