Logbook Loans Explained | allthelenders
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Logbook Loans

Logbook Loans explained by allthelenders

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What is a Logbook loan?

A logbook loan is a personal loan with added security. They are usually a desirable alternative to a standard loan product when the applicant has a poor or bad credit rating.

A logbook loan provides an authorised lender temporary ownership of the borrowers’ vehicle (Car, van, Motorbike etc.) by requesting the borrower to complete a ‘Bill of sale agreement’ to act as the security against the loan.

Once the contract is agreed the lender owns the vehicle whilst the loan is repaid and the borrower is given back the ownership by the lender when the logbook loan is paid in full. The borrower (the owner of the vehicle) carries on using the vehicle for the duration of the loan.

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What is a ‘Bill of sale’ agreement?

You will be asked to complete a bill of sale agreement when you apply for a logbook loan. This document underpins the security of the loan agreement for the lender and will be a conditional to a successful application. The lender temporarily owns the goods whilst the loan is repaid but gives the lender the right to take the vehicle if you default. The lender does not have to go through the courts to be able to take your vehicle because of the enforceable ‘Bill of Sale’ which is legally binding.

Is it a ‘logbook’ loan or ‘log book’ loan?

The correct version in the financial industry is logbook loan. The definition of logbook has a number of meanings relating to data, event and record management but in this financial context, it relates to an owners vehicle registration document.

For more information on a V5C, Logbook or vehicle registration documents (VRD) click here.

Can I apply for a Logbook loan anywhere in the UK?

Yes, you can apply for logbook loans throughout the UK (although a different protocol to ‘Bill of Sale’ is used in Scotland) but the Lenders must be registered with the Financial Conduct Authority. To check any lenders registration and accreditation details on the FCA register click here.

Are logbook loans available in Scotland?

Yes & No. Scotland has a different financial system to the rest of the UK and ‘Bills of sale’ are not legally binding. Therefore Scottish lenders offer logbook loans (as this is a known financial product that customers ask and search for) but it will be formally titled as a ‘Hire purchase Agreement’ or ‘Conditional Sale’ so that the vehicle can be taken if a default occurs.

Can any person or company offer a logbook loan?

No, logbook loans or vehicle logbook loans are only allowed to be provided by accredited lenders in England, Northern Ireland, Scotland and Wales. They should not be offered by any other organisation. It is best practice to check a lenders authorisation information on the FCA register before signing any credit agreement.

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What are the risks of a logbook loan?

If you default on any loan you will incur additional costs and charges and your credit rating will be affected in an adverse way. The negative impact of a bad credit rating can last for a long time so you should always avoid defaulting on any agreement. Logbook loans provide the lender with added security in the form of a motor vehicle so if you default and are unable to reach a satisfactory conclusion with the lender then they will be legally allowed to seize your vehicle to cover the unpaid loan capital, interest and the associated costs of the repossession.

How is a logbook loan paid out?

After a satisfactory application, the lender will transfer the amount borrowed to the applicants’ bank account via an electronic payment. You can ask for a fast payment but you may find that some lenders will charge an additional fee for this service.

How long can a logbook loan be taken out for?

There are many logbook loan providers throughout the UK and each will have different products with various repayment lengths, value ranges and terms and conditions but typically logbook loans range from 1 to 3 years.

Repayments & Instalments of a logbook loan

Logbook loans are paid in instalments exactly the same as any other personal loan or mortgage. The repayments are normally weekly and each payment made goes towards clearing the amount borrowed (the capital) and the interest due, as per your agreement with the lender.

Can I repay a logbook loan early?

In most cases lenders will allow you can repay the loan early in line with your credit agreement. For more information on settling your loan you will need to refer to the ‘Repaying the loan early’ or ‘Early settlement’ terms of your contract. If you are unsure, we suggest that you speak to your loan provider.

What happens if you default against a logbook loan?

If you have defaulted, your lender must write to you setting out their requests, demands and conditions within a predetermined time frame as described when taking out your credit agreement. Logbook loans are issued on the basis that your possession is at risk so if you default the lender will have a legal right to take your vehicle.

They do not need a court order to take the vehicle as, if you have defaulted and the predefined timeframes have expired, they are legally allowed to take it & sell it to cover the balance of the loan (including the interest) plus the cost involved in the seizure of the vehicle.


A logbook loan is a personal loan that is secured against a vehicle that you own outright. Logbook loans are an alternative loan product for those who have poor or a bad credit rating.

With a logbook loan you will have to pass temporary ownership to your chosen loan provider by completing a credit application form and a bill of sale agreement. The lender retains the legal right to your vehicle for the duration of your loan.

If you default the lender must notify you (in conjunction with their contractual obligations to you) and tell you that they intend to seize your vehicle. They do not have to go to court to take your vehicle if you have signed a bill of sale agreement.