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The Logbook Loan and Other Credit Options

16.04.2021 by Jack H

Alternative logbook loan 1

Are you looking for a same day cash loan? Are you finding yourself overwhelmed with different loan options and different lenders' acceptance criteria? You may be looking to borrow money for many reasons, such as a holiday loan, funeral loan, wedding loan, used car loan, home improvement loan, or maybe a debt consolidation loan.

With all the different types of loans out there, which one is best for your personal circumstances and for which purpose?

What Different Types of Loans Can You Get?

When choosing your next loan, there are two main types:

  • Secured loans: loans by which the lender will secure an asset as security to the loan. If you are unable to repay the loan, the bank or loan provider can repossess the asset and sell it to recoup the loan.
  • Unsecured loans: loans for which you do not have to provide security such as a home or asset. You borrow a lump sum and pay it back in fixed instalments over a set period.

If you have a choice between the two, you should only consider a secured loan if it is your final option or it's much cheaper. Generally, try to pick an unsecured loan and try not to put your personal assets up as a guarantee just in case something goes wrong.

Will My Credit Score Affect My Loan Choice?

As well as looking at your lending options, you should consider that your credit history will affect the types of loans you will be offered. This will certainly affect the applicable interest rates. Your credit record has a big impact on the type of loan you can get and how much it will cost.

However, some types of loans are specifically tailored to borrowers with bad credit, including guarantor loans, bad credit loans, Logbook Loans and door-stop loans.

Please note, lenders offering these types of loans may be more willing to consider your application, but they will increase the rates of interest to reflect the increased risk. Equally, if you have a good credit score, take the time to shop the market and consider which loan best meets your criteria.

What Are the Different Lending Options?

There are lots of different ways to borrow money. It's a good idea before borrowing to find out about the different options available so you can make a choice about which one is best for you.

We've detailed below the different lending options and which ones may be suitable for your circumstances, affordability, and ability to repay.

Bank Loans

Your local bank is typically the first port of call for a personal loan or small business loan for many borrowers; but it can also be the most time consuming and difficult to apply for. Before you apply directly to the bank and undertake a long and complicated application form you should consider your credit score. If your score is less than perfect, you may find the bank will reject your application at the "credit search." This will leave a negative mark on your credit history for other lenders to see.

If you continue with your bank loan application, the bank will offer a loan term of 12 - 120 months with varying rates of interest and both capital and interest repayment options. The bank will offer you a choice between fixed-rate and variable-rate interest. Fixed-rate financing means the interest rate on your loan does not change over the life of the loan. Variable-rate financing is where the interest rate on your loan can change, based on market factors outside your control. Because your interest rate can go up, your monthly payment can also go up

If the loan is required for business purposes, the bank will require security, often referred to as "collateral," for the loan. If the business is a brand-new start-up opportunity, then the bank may require further security in the form of a personal guarantee. Try to resist this if possible.

Doorstep Loans

Doorstep loans are slowly decreasing in popularity due to the extremely high rates of interest being charged by a handful of lenders. Not to mention, you must agree to allow people to show up at your door each week to collect the loan repayments.

This form of credit is very appealing, but the borrower is advised to use technology to go online to find more suitable, cheaper, more flexible, and less intrusive ways of borrowing funds.

Pawn Brokers

A pawnbroker is an individual or business (pawnshop or pawn shop) that offers secured loans to borrowers in lieu of personal property used as collateral. The items that have been pawned off to the broker are themselves called pledges, pawns, or simply collateral. While many items can be pawned, pawnshops typically accept gold, watches, cars, motorbikes, boats, jewellery, musical instruments, home audio equipment, computers, video game systems, and other valuable items as collateral.

There has now been a significant trend toward prestige car pawnbroking, where car owners have pawned their luxury, vintage, and classic cars. Car owners are regularly pawning luxury cars such as Ferrari, Bentley, Porsche, Lamborghini, BMW and Mercedes.

The asset is pawned for a fixed 6-month contractual period. There is no contractual obligation on behalf of the pawnshop to make any repayments during the contractual term. The pawner may redeem the loan at any time during the fixed term by repaying the amount borrowed back plus the agreed fixed rate of interest

It is worth noting that pawnbrokers are regulated by the Financial Conduct Authority. If the loan is not redeemed within the 6-month period or extended by mutual consent the pawned item will be offered for sale by the pawnbroker to clear the debt and the balance of the item repaid to the pawner. Unlike other lenders, the pawnbroker does not report the defaulted loan to any credit reporting agencies.

Credit Cards

Many banks, finance companies, and larger supermarket and store chains are now offering credit cards to both the prime and subprime markets. The annual percentage rates (APR) being offered to consumers will vary significantly depending on your credit score, with a higher APR and less competitive rates being offered to borrowers with low credit scores. The amount of interest varies between providers, so shop around for the best deal. If you go over your credit limit, the provider may charge you a fee, and some also charge an annual fee.

To apply for a credit card, you will need to apply online or via post complete an extensive application form and undergo a credit search which will appear on your credit file. The approval process can take a few weeks, and you will need to wait for delivery of your card.

You will be allocated a credit limit to spend up to. If you pay off the total amount by the due date, you will not be charged interest. If you do not pay it off, you may be charged interest on the amount outstanding.

It is worth noting that making a full payment or partial payment on time each month is an excellent way to improve your credit score.

A credit card is good for short term credit to cover an unexpected purchase or emergency and is worth having in your wallet. However, it is advised to repay the balance in full at the end of each month to avoid the unnecessary and very expensive interest charges mounting up. If you are looking to use your card for that big purchase or to spread payments out over a longer period to help manage your expenses, then stop! Do not use a credit card. There are other, better, lower-APR forms of credit available.

Store Cards

Many shops have their own types of credit accounts known as "store cards." They offer shopper store card options to build loyalty and to offer rewards and incentives. There are two types of cards that shoppers can choose from:

  • Monthly Account: The store sets a credit limit, the shopper can spend up to this limit and providing the balance is repaid in full each month no interest is charged. Interest will only be charged if the amount is not paid off in full at the end of the month, much the same as a credit card.
  • Budget Account: The shopper is allocated a lower credit limit and can pay a regular amount each month to cover the cost of goods bought throughout the year, much like a loan.

It is advised to shop around, as many store cards offer discounts on goods in the shop. Shoppers beware: the interest charged can be higher than on bank loans or credit cards, so always check which is cheaper overall.

Charge Cards

Charge cards are different from credit cards because you must pay off the amount you borrowed in full at the end of the month. Interest is not charged on the amount you borrow. If the amount is not repaid in full, interest will be charged, much as with a credit card. Please note, shop around for your preferred charge card, as you will have to pay an annual fee. Some cards offer a range of extra member benefits and discounts that may make the fee worthwhile.

Payday Loans

Payday loans are short-term, high-cost credit for relatively small loan amounts. They are available from high street shops and internet sites. These types of loans have been investigated by the FCA due to the excessive rates of interest and a historical lack of affordability checks taken out by lenders before the loans are approved.

Payday loans have typically been easy to get, but be aware that interest rates are very high. So really think hard before committing to this type of loan, especially as there are other cheaper payday loan alternatives such as logbook loans or pawnbroking.

If you decide to get a payday loan, shop around, and compare the interest and charges before you borrow. Understand the repayment options and what will happen if you can’t pay the loan back. Ask how this will affect your credit score.

The loan repayments are taken each month via your bank by the lender with a continuous payment authority (CPAs). This gives the borrower the ability to try and collect the repayments from your bank on multiple occasions. Make sure to ask how they can be cancelled.

When you apply for a loan, lenders should check whether you will be able to pay it back. They will need to complete a detailed affordability assessment and suitability checks to ensure you have enough money coming in each month to be able to pay the loan back. Ask the lender to fully explain your loan, including how much you will have to pay back and what fees and charges will apply if you fail to pay the loan back.

Logbook Loans (aka V5 Loans)

Are you a car owner, and is it free of finance? If yes, why not consider a logbook loan or a V5 loan? Logbook loans are often a perfect option that allows you to release the cash from your car, whilst still retaining full use.

A logbook loan means the car owner offers the car as security to the lender for the duration of the loan, and the ownership temporarily transfers until the loan is repaid in full.

Logbook loans, or V5 Loans, range from £500 to £100K, with loan terms ranging from 12 – 60 months with monthly or weekly interest and capital repayments. Some lenders will secure the logbook loan on the car via a "Bill of Sale’ agreement, which is currently prohibited in Scotland and will always require a logbook, or V5, and spare keys.

The new type of logbook loan offered by lenders such as uses a "hire purchase agreement," which is valid throughout the United Kingdom, including Scotland, and offers the borrower greater protection. Using a hire-purchase agreement allows the loan to be completed online without the need for a home visit or the surrender of the logbook.

In all circumstances, the borrower retains full use of the car for the duration of the logbook loan. All logbook loans are typically up to 70% of the vehicle's trade value, and loans are subject to an affordability assessment and credit check.

Please check with individual lenders, but some lenders will allow overpayments and then recalculate the next interest payments on the lower balance. What's more, most lenders will allow the borrower to settle the loan early, 100% penalty-free. A flexible logbook loan is quick and simple, and it can be completed and the cash paid into the bank the same day.

A key consideration for obtaining a cheap logbook loan is the vehicle requirements. All vehicles must be under 10 years old, and all prestige, classic, and vintage cars are acceptable security for a logbook loan. The vehicle must be a personal car; no company cars are allowed. The maximum permitted mileage is 150,000. Typically, cars must be free of finance to qualify for a logbook loan or V5 loan. Although lenders such as can clear existing finance agreements if required.

It is worth noting that no additional keeper will be added to the logbook, and the car must be fully taxed, have a valid MOT, and be fully comprehensively insured in order to qualify for a logbook loan.

Make sure you research your loan to find the cheapest logbook loan lenders and ensure they use a hire purchase agreement for your protection, convenience, and flexibility.

The Pros And Cons Of Logbook Loans

Logbook loans are proven and preferable solutions for people looking to raise short-term finance from their vehicles. A Logbook Loan is the perfect way for a car owner to withdraw cash from their equity in their car via a same day cash loan, whilst still retaining full personal use of their vehicle. However, the lender becomes the temporary owner of your vehicle until the borrower pays back the loan. It is worth noting the car is secured against the loan, and if the borrower fails to make the loan repayments and doesn’t stay in touch with your lender, the car is at risk of repossession.

How Does A Logbook or V5 Loan Work?

Most logbook loans range from £500 - £100,000, up to a maximum of 70% of the car's trade value. The loan will be subject to the borrower completing an affordability assessment and credit check.

If a borrower uses an old-style logbook loan [which is only applicable in England, Wales, and Northern Ireland], they will have to surrender the vehicle registration document and sign both a credit agreement and a bill of sale. This means the loan company becomes the temporary owner of your car, and the borrower continues to drive the vehicle, provided the loan is maintained. The bill of sale is subsequently stamped at the Royals Courts of Justice and allows the Lender rights of repossession after two failed monthly loan repayments.

New lenders such as use a Hire Purchase agreement, which is valid in the whole of the United Kingdom. It provides the borrower greater protection from repossession; the logbook loan can be completed online without the need to surrender the logbook or V5C.

How Much Does A Logbook Loan Cost?

Loan rates range from 6% to 10% per month, and experienced lenders such as provide flexible loan terms from 12 – 60 months and allow the customer to settle the loan early ‘penalty free," make overpayments, and pay reduced interest on the lower balance. The loan is subject to a credit check to confirm affordability and suitability. Note, all lenders will consider borrowers with subprime credit histories as well.

Logbook Loan Lending typically is more expensive than other mainstream forms of lending and this is associated with the credit risk as the borrower can drive the vehicle for the duration of the Logbook Loan. The typical annual percentage rate (APR) for a logbook loan could be more than 200% APR. representative logbook Loan APR Example: -

If you borrow £1,000 over 36 months at a flat rate of 84% per annum [fixed] with a representative 204.2% APR you will make 36 monthly payments of £97.98, making a total amount repayable of £3,660.00, including a £40.00 document fee and a £25.00 option to purchase fee. The total charge for credit is £2.660.00. Loan repayment length from 18 to 60 months. The maximum APR is 232.1%.

Your loan is secured against the vehicle, and missing payments could put the car at risk of repossession.

What Happens If I Default on My Repayments?

The loan is secured against the security vehicle, and the borrower must confirm they are the legal owner and registered keeper of the vehicle. If the borrower fails to maintain payments on their logbook loan or V5 loan, it could have serious consequences, including additional charges. The car could be at risk of repossession. If a borrower is in default, the lender is required by law to serve the relevant notice to allow the borrower ample time to resolve the situation. No lender will simply repossess a vehicle without adequate notice.

Once a vehicle is repossessed, the lender will typically store the vehicle for a period of 7 – 14 days to allow the borrower a chance to pay the balance of the logbook loan and collect the car. If after this date the debt remains unpaid, the car will be sent to auction to achieve the best possible open market price. If the vehicle is sold for less than the amount of the debt, the borrower may still be liable to pay back the difference to the lender.

It's worth noting that most Logbook Loan lenders or V5 lenders will work with the borrower to resolve debt issues, and repossession is considered the very last resort for a Logbook Loan debt issue.

Can Anyone Apply for A Log Book Loan?

To apply for a logbook loan, you have to be over 18 and the legal owner of a vehicle with a minimum trade value of £2,500. Typically, the car must be free of finance. If your car still has outstanding finance, then speak to a lender like and they may be able to clear the existing finance and lend additional funds on top

If you have an existing logbook loan, why not switch your loan to another lender and negotiate a better rate? Switch your logbook loan to and reduce your loan repayment by at least 10%. Plus, you may even be eligible to top up your loan, subject to our affordability and car value checks.

How Can I Be Sure the Lender Values My Car Accurately?

Logbook loan lenders such as use CAP, the valuation experts, with over 30 years of industry experience, to guarantee an accurate and fair valuation for all our vehicles, including luxury classic and vintage vehicles. CAP is the premier provider of used car valuations and is recognised as being the most accurate by car dealers, finance suppliers, and other motor professionals across the UK.

How Quickly Can a Logbook Loan Complete? will complete the application online without the need for a home visit. We will even complete the car inspection via ‘WhatsApp’ and we aim to complete the loan the same day and transfer the cash into the borrower’s account, often within 1 hour.

What are the differences between and other logbook loan lenders?

Loan Features:logbook loans from logbook loans
AgreementHire Purchase agreement - regulated by the Consumer Credit Act 1974Bill of Sale agreement - regulated by the Bill of Sale act 1882
Home Visit Required

You complete the loan online. A home visit is not required.

A company agent is required to meet you face-to-face in your home or place of work.

Loan Completion and Car Inspection

All loans are completed online using an e-signature for your convenience.

We inspect your car via 'WhatsApp' in under 5 minutes.

Typical loan completion can take up to 24 hours - subject to agent appointment.

Physical car inspection and loan documentation requires an independent witness.

Speed of Pay-out

The same day - We aim to pay out your loan within 60 mins of ONLINE receipt of contract and loan documentation from the borrower.

Typically, within 1-2 days and is subject to receipt of contacts and loan documentation being received from the agent.

Logbook and spare key required

We NEVER ask you for your logbook or spare key.

You must surrender your logbook book and on occasion a spare key.


Our representative APR is 204.2% [Please see the representative example for full details].

Representative APR for old-style logbook loans range from 209% to 500% depending on the lender.

Extra Fees and Charges

£40 document fee and £25.00 option to purchase fee is payable with final payment.

No fees for phone calls or letters.

Logbook lenders often charge a loan set up or administration fee - typically £60.

Some lenders charge extra for phone calls and texts.

Settle Early

Yes, we allow you to settle the loan 100% penalty-free at any time - no minimum loan period.

Yes, subject to lenders specific early redemption charges and in some cases minimum loan period

Overpayments allowed

Yes, we accept overpayments and re-calculate your new repayments off the lower balance.

Yes, overpayments are allowed, not all lenders re-calculated the new repayments off the lower balance.

Apply for a Same Day Cash Loan with

Our priority is to provide customers with the perfect flexible lending solution to meet their exact needs and requirements.

  • With loans from £500 - £150K
  • Low-Interest rates with a price promise
  • Loan terms from 1 year to 5 years
  • Option to pay weekly or monthly
  • No hidden fees or charges
  • No minimum period
  • The ability to settle loan early penalty-free
  • And the borrowers can make overpayments and pay less interest

This is unlike other Logbook Loans lenders that offer lower loan amounts, high rates of interest, a minimum 3-month loan period and shorter loan terms which can often increase monthly repayments.

And don’t forget, many Logbook Loan lenders will often impose fees for settling up the loan and early redemption penalties if the borrower wants to settle early.

If you want a quicker, more flexible and proven alternative to a Logbook Loan visit and enter your vehicle registration and see how much you can borrow, an immediate decision in principle or call us on 0333 577 5000 and speak to one of our expert loan consultants.