Should You Take Out a Logbook Loan?


When you don’t have an emergency fund, you have bad credit and you needed cash fast, what do you do?

Taking out a personal loan from banks and high street lenders is a viable option but chances of approval are very low. You might get more rejection than ever seeing that you are tagged as a high risk borrower. You can certainly try borrowing from family or friends for small amounts. But what about if your needs a larger amount for a medical emergency? This is where logbook loans may come handy.

Logbook loans are personal loans secured against your vehicle. As long as you’re of legal age, a UK resident and a vehicle owner, you are welcome to apply for a logbook loan. It doesn’t matter if you have bad credit or a history of CCJs, default or bankruptcy. Even if you’re self-employed or working part time, the financial product remains a viable option granted that you can provide proof of steady or regular income.

But there’s a catch. Or make that two catches. While easy to avail, logbook loans are expensive. It comes with high interest rates which is why most experts suggest steering clear from the financial product. It has an average representative APR of 400% which is several times more than what traditional loans cost.

Another thing you need to think about is vehicle repossession. Since logbook loans are secured against your vehicle, your lender can recover your car when they deem appropriate. You can lose your car simply because you were unable to keep up with your monthly repayments.

Before you decide to use your car to take out a logbook loan, it’s best to understand the possible risks. Only if you’re really sure you can afford the loan should you go for the deal and apply at