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  1. Enter Logbook Loan Amount (the amount you want to borrow)
  2. Enter Interest Rate and Repayment Term
  3. Calculate: view your Monthly Logbook Loan repayments
Logbook Loan Calculator

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What are log book loans?

Log book loans are a financing option available for owners of vehicles to take secured loans against their vehicles. The borrowers can continue to use their vehicle till the time they are repaying the loan. However, in case of inability to make repayment, the borrowers face the risk of losing the vehicle.

How does the process work for log book loans?

As primary requirements, the vehicle owner (borrower) should be the legal owner, and the vehicle should have a minimum value of £50. This valuation should be the value at the time of the deal, and not the original purchase price. And the borrower should have a regular stream of income.

The borrower should hand over the vehicle's logbook or registration document to the lender. A credit agreement is made between the two parties, which is referred to as 'a bill of sale.' This agreement implies that the lender is the new temporary owner of the vehicle. These agreements are legal in England, Wales and Northern Ireland. However, the lender should register the agreement with the High Court.

Log book loans are offered either in cheque or cash (with up to 4% additional fees). Usually, the loans are available for a period of 78 weeks. However, early settlement options are also available.

Pros of Log book loans:

  • These loans are provided without any credit check, and so people with poor credit rating are also eligible.
  • The loans are easily available, including on the internet. Their disbursement can at times be within 15 minutes.
  • Based on the value of the vehicle, loans of up to £50,000 are available. Usually, the loan amount is up to 50% of the car's value, but it can also go as high as 70%.

Cons of Log book loans:

  • Interest rates can be 400-600% APR, and installments are payable every week on the original loan amount. Suppose you take a loan of £2000 for 78 weeks. If the weekly payment is £75, you will end up repaying around £5,850 or around 300% of the original amount. These rates are much more than other sources of finance.
  • There is a risk of not being able to repossess the vehicle in case of failure to make repayments. The logbook lender is allowed to use the services of bailiffs for seizing the vehicle. There is no need for the lender to go to court to repossess the vehicle.
  • At times, terms and conditions may not be clearly explained for such loans. According to a study, almost 20% of lenders did not clearly explain the rules. For example, in certain agreements, the regular payments may only be interest payments with the principal still remaining till the final payment.
  • There may be early repayment fees for repaying more than a certain amount in a year.

Example of log book loans:

Tim is the owner of a Skoda Rapid worth £12,000. Tim is in urgent need of money, but he does not have any financing options available due to his low credit rating. In such a case, he will go to a log book owner XYZ Corporation, which will give him a loan of up to £6,000. During this loan period, XYZ Corporation is the owner of the vehicle; however Tim can continue to use the vehicle till the time he repays the loan. Suppose Tim is not able to repay the loan, then XYZ Corporation can seize the vehicle through legal means.

Logbook Loan Warning!!!

Logbook loans are a product targeted at the desperate. The pressure caused by financial debt can be horrendous. This pressure can result in you making poor decisions. A logbook loan, particularly for a large amount, could cripple you financially in the long term. Logbook loans can provide a short term financial fix if there is a dire family emergency etc. but they should always be a last resort. Use a bank, building society etc. or if you are in financial hardship or spiraling debt, contact Citizens Advice or visit the specialist debt advice section of their website here

Use this calculator to work out how much your monthly repayments will be on a logbook loan. The logbook loan calculator will also provide an illustration of how much you could expect to repay each month based on different repayment periods. If you are thinking of taking out a logbook loan it is important that you:

The logbook loan calculator will provide your a monthly interest repayment over 1 year, 2 years, 3 years, 4 years, 5 years, 10 years and compare them to a monthly repayment period of your choosing (so you can create your own logbook loan illustration).

Considerations before taking out a Logbook Loan

  • Affordability: Be sure you can really afford to make the logbook loan repayments. Only you really know if you can afford the finance or not and taking out loans which you will struggle to repay will only cause you financial hardship and pain in the future.
  • Shop around: It always pays to shop around and see what deals are available. Most banks and building societies run promotions at various points of the year. Never assume that one lender is better than the other, look for the good deals as they could save you a lot of money. Banks are normaly significantly cheaper than logbook loan providers!
  • Check the Interest Rate: The most common mistake that lenders make is not fully reading and understanding the interest rates applied to their logbook loan. Make sure that the catchy low interest rate is the one you are getting. Most lenders advertise at low interest rates to get you in the door but you are likely to find that achieving the low rates means borrowing more than you budgeted for or taking out the loan over a longer term, this will mean you repay much more money! Don't be tempted!
  • Borrow Little, Repay Quickly: The best logbook loan is one repaid quickly. A quick repayment means less interest paid and less stress about your debt.
  • Pay Day Loans: Pay day loans are brilliant if you want to destroy your financial credibility, get yourself into spiraling debt and have years of stress and anxiety over your finances. DO NOT use Pay Day lenders,there are much better options. They do not care about you or your finances and will destroy your life simply to make money. At iCalculator, we seriously hope that the government takes measures to outlaw these morally and ethically corrupt businesses. Logbook loan providers are, in our opinion, in the same category as payday loan companies. They prey on the vulnerable and trap people in debt that they will often never be able to recover from. THINK TWICE!!!!
  • Don't Lend at All! It's difficult to avoid taking loans in modern society. Modern life is about consumerism and spending. Our grandparents survived and had healthy life's by getting by and enjoying the rare treats. There is a lot to be said for living a simpler life without financial stress. If you can, save. Make that reward or treat worthwhile my making your money work for YOU and not for someone else.
  • Personal Loan or Logbook Loan? Personal loans normally offer better interest rates than car loans but your really should shop around. Second hand dealerships normally offer ridiculous APR rates and will push you to take the loan, often showing a lower APR that you will receive. Used car loans typically provide large commissions for used car dealerships and will rarely offer a better interest rate that a personal loan. If you are looking to buy a new car, shop around and be patient. Almost every dealership offers a 0% finance deal at some point in the year. You can get your dream car and a dream interest rate if you are patient and buy wisely.

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