Logbook Loans

With the annual interest rate of 100% you don't want to be borrowing in this manner for long - see the representative example of the right hand side panel. Most loans tend to be taken for 6 to 18 months.

There are 2 critical factors determining the maximum amount you can borrow:

1. It has to be affordable - i.e. you can demonstrate that the loan repayments are manageable within your monthly budget. You will be required to provide the lender with evidence of your income and outgoings.
2. The vehicle's value - the lender's maximum loan is typically between 60% and 100% of the vehicle's market value.

The average loan value is around £1000.

These are the steps for applying and completing a loan:

1. You complete the short enquiry form and get your quotation
2. The lender will contact you and ensure that a logbook loan is right for you given your personal circumstances.
3. You application will be assessed and an affordability check will be done - you will need to provide ID and details of your income and expenditure
4. With your approval a credit check is done. If it is OK you will receive a quotation.
5. If you wish to proceed the lender will want to see the following paperwork:
   • the vehicle logbook (the V5)
   • the MOT certificate
   • the insurance documentation
   • your ID (e.g. passport or driving licence)
6. The lender will then want to see the vehicle itself - you take it to one of the lender's many branches, or there is the option of a home visit
7. If you are happy with the loan agreement you sign it and the "bill of sale" (that transfers ownership of your vehicle to the lender).
8. You get your cash loan.

To qualify for a logbook loan you must meet certain criteria:

• your vehicle must not have any outstanding finance
• your vehicle must have an MOT (if it is 3+ years old) and typically cannot be more than 10 years old
• you must be the legal owner of the vehicle
• You must be over 18 and live in England, Wales or Northern Ireland (sorry, we can't help you if you live in Scotland due to a different legal system)
• you must be able to demonstrate that you can afford the loan repayments

When you use a logbook loan you use your vehicle as security. A Bill of Sale is the legal device that makes your lender the temporary legal owner of your vehicle until you have repaid the loan in full. If you default on a term of the loan (e.g. late payment) then you would be served a default notice. If you do not put right the default then the lender is permitted to repossess your vehicle and sell it to cover the remaining loan amount. It does not have to seek any further permission to do this.

Under law you have a period of 14 days from the time you sign the agreement in which you can change your mind and cancel the agreement. If you cancel you must repay the loan within 31 days although you will be charged interest on a daily basis.