Logbook loans - Can I get a secured loan against my car?

What is a logbook loan?

A logbook loan is a type of secured loan. You borrow money against the value of your car, and in return, you hand over your car's logbook (the V5C document) to the lender. This means they have a legal claim to it until you've paid off the loan. You still get to drive your car as normal.

Logbook loans are often marketed to people who need cash quickly or have a poor credit history, because the car itself acts as security for the loan. This convenience comes at a cost — logbook loans are one of the more expensive ways to borrow, so it's worth checking other options first.

You can get a logbook loan in England, Wales or Northern Ireland — they aren't available in Scotland due to different rules on bills of sale.

How do logbook loans work?

You apply for the loan and give the lender your car's logbook, along with proof of ownership. The lender values your car and offers a loan based on that value.

• You can keep driving your car while you repay the loan.
• The lender registers a bill of sale against the vehicle.
• If you fall behind on payments, the lender can repossess the car to recover the debt.

How much does a logbook loan cost?

Logbook loans are a high-cost form of borrowing. Rates vary between lenders, but it's common to see APRs of around 400% or more. This makes logbook loans significantly more expensive than most other loans or credit cards.

Before you sign anything, check the total amount you'll repay, not just the monthly payment — and compare this against other borrowing options.

How much can I borrow with a logbook loan?

The amount you can borrow depends on your car's value and condition. Lenders typically offer between 60% and 100% of your car's trade or resale value, though this varies by lender and circumstances.

Car value	Typical loan amount (based on 60% of car value)
£10,000	£6,000
£25,000	£15,000
£40,000	£24,000

How long do logbook loans last?

Logbook loans usually run for a shorter term than other secured loans, often between a few months and a few years. Shorter terms mean higher monthly payments but less interest overall — worth bearing in mind given how high the interest rate typically is.

What can I use a logbook loan for?

There's no strict rule on what you can spend a logbook loan on. Common uses include:

• Covering an unexpected bill or repair
• Paying off other debts
• Managing a temporary cash shortfall

Given the cost involved, it's worth asking whether a cheaper form of borrowing could cover the same need first.

What do I need to get a logbook loan?

To apply, you'll usually need:

• Your car's logbook (V5C)
• Proof you own the car outright (or that finance is settled)
• Proof of income
• Proof of address

Can I get a logbook loan with bad credit?

Yes. Logbook loans are often aimed at people who may struggle to get approved for other credit, including those with a low credit score or a less-than-perfect credit report.

Because the loan is secured against your car, lenders may be more flexible than they would be for unsecured borrowing — but this flexibility comes with a much higher cost, so it's worth weighing up carefully.

What happens if I can't pay my logbook loan?

If you miss payments, the lender can take steps to repossess your car. This is a serious risk, so it's worth speaking to your lender as early as possible if you're struggling.

Free debt advice is also available from organisations like Citizens Advice, MoneyHelper, National Debtline, and StepChange.

Can I get a logbook loan on a financed car?

Usually not. Logbook loans require you to own your car outright. If you still owe money on car finance, the finance company holds an interest in the vehicle, so you won't be able to use it as security for a separate logbook loan until that finance is paid off.

If you're still paying off car finance, you have these options:

• Wait until you finish paying off your current loan
• Settle your existing car finance early
• Look for other types of loans instead

Some lenders might consider your application if you only have a small amount left to pay on your car finance, but this is rare.

Is car finance a secured loan?

Yes, most car finance agreements are secured loans. With car finance, the car itself acts as security, meaning the finance company can repossess it if you fall behind on payments, much like with a logbook loan.

Alternatives to a logbook loan

Because logbook loans are expensive and put your car at risk, it's worth ruling out other options first, such as:

• A homeowner loan (if you own your property)
• An unsecured personal loan
• A credit union loan
• A credit card (for smaller borrowing amounts)
• Speaking to your existing lenders about a repayment plan (if applicable)

A comparison site can help you see rates side by side and check your eligibility without any impact to your credit score.

What should I consider before taking out a logbook loan?

A logbook loan is a big decision and one of the more expensive ways to borrow, so take a moment to think through the following.

• Have you ruled out cheaper alternatives?
• Can you comfortably afford the repayments each month, including the high interest?
• What happens to your car if you fall behind?
• Do you understand the full terms before signing?

Protecting your car and finances

A logbook loan can give you quick access to cash, but the high interest rates and risk to your car mean it's best treated as a last resort. Compare your other options first, borrow only what you need, and reach out for free advice early if you're worried about keeping up with payments.