Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Logbook Loans

Apply for up to £5,000 over a period of 1 to 60 months.

Representative Example: If you borrow £500 over 6 months at a rate of 25.5% per annum (variable) with a representative 46.19% APR you will make 6 monthly payments of £92.96, repaying £557.76 in total.

Warning: Late repayment can cause you serious money problems. For help, go to www.moneyhelper.org.uk/en.

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Understanding Logbook Loans


What is a logbook loan?

Logbook loans, sometimes referred to as a V5 loan, is a short-term loan that is secured on a vehicle. This loan enables borrowers to tap into the value of their car without having to sell it and can be secured against almost any type of vehicle, including motorcycles, motorhomes, vintage cars and even boats and light aircraft.

After taking borrowing the money, a logbook lender will require that you hand over the vehicle’s logbook. However, you will still retain physical possession of the vehicle as long as you keep making payments.

If you have a low credit score and are unable to obtain finance from lenders with a lower interest rate, then a Logbook Loan could be a fast and effective option available to you. However, this type of financing has been subject to much criticism. High-interest rates and harsh repayment terms make this type of loan a controversial method of raising short-term finance and should be avoided where possible.

How do logbook loans work?

When a logbook loan is issued, you will be required to sign two separate agreements:

  • A Personal Loan Agreement: that sets out how much money you borrowed and defines the terms of repayment. The Consumer Credit Act regulates personal loan agreements.
  • A Bill of Sale Agreement: Making the lender the legal owner of your vehicle up until you have repaid your loan and any applicable interest in full.

Most lenders will ask that you hand over your V5 logbook. It is worth noting that even if you don’t give them these documents, the vehicle still belongs to them and it will be illegal to sell it.

How can I take out a V5 loan?

V5 loans are aimed at people who may not be able to secure loans from mainstream lenders but own a vehicle and need a relatively large amount of money quickly. Because you are using a property to secure the loan, a Logbook Loan is available to anyone no matter how bad their credit rating is.

However, proving that you are able to repay the loan on time is an essential part of the application processes. Many lenders will require that you provide payslips or invoices that prove you receive a regular income.

Typically, you can apply to borrow from £500 up to 50% of the vehicle’s value, depending on your vehicle’s age, condition and mileage. The money is usually obtained in the form of a cheque, but some lenders may offer cash or an electronic transfer to deposit the funds directly into your bank account. Loans are processed quickly, normally in less than a day.

Whether you live in Liverpool, or Lizard Point, the most southerly town in the UK, we will find a solution for you. While readily available in England, Northern Ireland and Wales, Logbook loans are not common in Scotland. This is because Bills of sale are not legally binding under Scottish law, and so cannot be used as security.

How do I make my repayments?

After taking a Logbook Loan, you will be required to pay back the loan in instalments over a period of 1 to 60 months at a flat rate over an agreed period of time until the loan is paid back in full. Assuming you meet all of the payment deadlines, you will fully pay off your loan after a fixed number of instalments.

The number and size of each repayment instalment vary with different companies and loan agreements. Some loans can have as few as 2-3 instalments and others with over fifty, spread out over a maximum of two years.

Usually, each instalment includes the interest on the loan, and the instalment amount is fixed ahead of time. However, many lenders include provisions that allow borrowers to pay more than the fixed instalment amount when they can, reducing the total amount of interest they will have to pay and helping them to pay off the loan early.

What does representative APR mean?

APR stands for ‘annual percentage rate’. Representative APR is the total cost of borrowing money over a year, which includes the interest and standard fees you will have to pay.

It is ‘representative’ as 51% of applicants will receive the same rate of interest, or lower, that is advertised by the lender. Therefore, it is not guaranteed that customers will receive the same APR that is advertised.

Instead, a customer will likely be offered a personal rate on a loan, which can be lower, higher, or the same as the advertised APR. Personal rates are generally influenced by factors such as credit score, personal finances and how much you want to borrow.

With the lenders we work with at Flexy Finance, the representative APR that we advertise is 46.19% APR.

Things to consider before applying

Before you apply to borrow any type of personal loan – you should take a few things into consideration to ensure that you are able to repay the loan should your circumstances or finances change during the course of your loan agreement.

What are the risks?

This is the most important factor to consider any time you borrow money. What if you suddenly lose your job? What action will the lender take if you are unable to make payments on time?

Take time to carefully think through these important considerations. Missing even a single payment may cause interest rates to go through the roof, and you could lose your vehicle. Make sure you understand the risks involved and work out a plan should the unexpected happen.

How do I get the best loan?

When shopping for a Logbook Loan, one of the main things you should take into consideration is the interest rate. There are hundreds of lending companies in the UK, each offering different interest rates and loan terms, but you probably don’t have time to review them all.

Luckily, there are as many websites and companies in existence, that will help you find the best possible deal on your loan. Simply provide your details, including personal, income, employment, and car information, and they will search their database to find lenders with reasonable rates. Compare these options well and choose the one that best suits your unique financial needs.

What do you need to borrow the money for?

Before applying for a logbook loan, ask yourself whether you really need the money. Unless you’re facing a serious crisis or need to make a very necessary purchase, steer clear of Logbook Loans.

Avoid taking out this type of loan for frivolous purchases such as fancy new smartphones, the latest gadget or even a vacation. Taking on an unnecessary loan will likely have serious consequences.

Can you afford to repay the loan?

When facing a serious financial crisis, people have a tendency to first find money through any means and deal with the consequences later. This can have a bad outcome, especially with Logbook Loans.

Loan companies set and enforce very strict repayment terms. Late payments often result in heavy fines and sometimes higher interest rates.

Additionally, if you are unable to make payments, your lender can legally seize and sell your vehicle. This will go on your credit report, which will affect your chances of getting another loan in the future.

Do you have other affordable options for obtaining finance?

Make sure to look into alternative loan application options before you settle for a Logbook Loan. Your bank might be willing to provide you with a personal loan if you have a loyal customer. Also, your bank could give you a secured a personal loan against valuable items such as art pieces and jewellery, at a very low-interest rate.

What should I do if I’m struggling with debt?

It is important to remember to not to borrow more than you can afford, so always borrow responsibly. These loans should not be used for long-standing financial debt or other issues. Remember, if you are struggling with debt please click on the links below:

What are the pros and cons?

Logbook loans have become quite popular in the UK in recent years. More borrowers than ever before are turning to this loan type for a quick fix to their financial woes.
However, these loans also get bad publicity from financial experts, who warn of the risks of taking such a high-interest loan. Whatever the case, if you are considering applying for a Logbook Loan, it’s important to know the benefits and risks of what you will be getting yourself into. Below are the pros and cons of V5 loans.

What are the advantages?

  • Accessibility: Many lending companies now have websites which means you can shop for loan deals online. If you are eligible for a loan, all you need to do is search for a reputable lender with reasonable rates and apply online.
  • Quick approval: If you meet the lender’s criteria and can provide all the required documents, loan approval should be very fast.
  • Flexible loan amounts: Logbook loans are more flexible than payday or cashbook loans. This is because they are secured against a vehicle, giving you the option of borrowing from £500 up to potentially the full value of the vehicle. This allows you to meet a wider range of financial needs. Whether to pay for a small medical emergency or expensive roof repairs.
  • Flexible repayment: You have the option of agreeing to a repayment term of between 3 months up to 3 years. Choose a comfortable payment term that will allow you to settle your loan at the earliest possible date with the lowest risk of defaulting on payments.
  • A perfect credit score is not required: This is possibly one of the best advantages of Logbook Loans. While other personal loans require borrowers to have good credit scores, logbook loans don’t. As long as you have a vehicle to serve as collateral, a Logbook Loan is available to you.

What are the disadvantages?

  • Risk of losing your vehicle: When you sign the loan agreement, you temporarily hand over ownership of your vehicle to your lender. If for any reason you default on payments, the lender will enforce the right to repossess and sell your vehicle to recoup compensation on the loan. This will not only leave you without a way to travel to and from your job, but you will also suffer a huge hit to your credit score.
  • High-interest rates: One of the biggest disadvantages of Logbook Loans is that they come with very high-interest rates. Compared with other types of loans, logbook loans are among the most expensive. Many lenders keep interest rates as high as 400%, which means you will pay back over 4 times the amount you borrowed.
  • Debt trap: If you’re a borrower with a poor credit score, it’s easy to get caught in the cycle of constantly borrowing money to meet your needs. Once you fall into the debt trap, it’s difficult to get out and you’re likely to further ruin your credit score. To avoid this, only borrow when absolutely necessary, and only what you can repay back in time.
  • Additional Charges: When you miss payments, the lender has the right to penalise you and the interest rate on your loan will often skyrocket. Make sure you read the fine print of your agreement before taking on a logbook Loan to understand the consequences of defaulting on a payment.

Logbook Loan responsible lending practices

Most lenders in the UK who offer Logbook Loans are members of the CCTA (Consumer Credit Trade Association). The CCTA has a code of practice that provides extra protection for borrowers. Members of the CCTA are required by law to adhere to the principles of the code.

Responsible Lending practices

Some of the main points of the code of practice include:

  • If you are unable to repay the loan, you may be able to hand over the vehicle at any time to cover the balance.
  • Before you sign the agreement, your lender must inform you of any charges that they will add if you default on payments.
  • If you are having trouble repaying the loan, the lender must consider other options with you to find alternative ways to repay your debt. The lender should only repossess your vehicle if they cannot agree a repayment arrangement with you to clear the arrears.
  • If a money adviser is helping you, the lender should hold action on your account for at least 30 days while you come to a payment arrangement.
  • If they take your vehicle away, the lender should not try to sell it for 14 days. This is to give you time to make an offer to try and keep it.
  • Lenders should try to sell your vehicle for the highest possible market price.

What is the alternative to a logbook loan?

The ease of obtaining Logbook Loans make them a tempting option for people who need to raise finances quickly but have been turned down by mainstream lending institutions. However, these are exactly the kind of people who are advised to avoid Logbook Loans and instead look for alternative ways of obtaining money.

Logbook Loan alternatives

  • Credit Unions: If you’re in a financial crisis, make sure to consult with your credit union. Credit unions are non-profit co-operatives whose members pool their savings to provide each other with loans at low-interest rates. If your credit score is less than perfect, credit unions are a much better alternative to Logbook Loan lenders.
  • Payday Loans: As the name suggests, a payday loan is a loan that is typically repaid on the next scheduled payday. This type of credit carries high-interest rates and is not ideal if you need a large of money particularly because of its short repayment term.
  • Peer-to-Peer (P2P) Lending: Peer-to-peer lending is another alternative you can explore if you’re finding it difficult to get a loan from banks. Peer-to-peer lending is a growing trend in the UK and serves as an online platform which brings together borrowers and individual lenders. While many P2P lending sites perform credit checks, because you are dealing directly with individuals rather than financial institutions, your loan application may have a higher chance of approval.
  • Guarantor Loans: This type of loan requires for your application to be backed up by another person, a guarantor. If you default on payments, your guarantor will be responsible for the repayments. If you are sure you will be able to pay back the money on time, and you have someone who trusts you, has a good credit score and is willing to be your guarantor, this loan is a great option for you.
  • Borrowing from friends and family: If you have exhausted all other options, as a last resort, consider turning to your friends and close relatives for help. While this type of loan is usually interest-free, failing to keep up your end of the agreement can cause serious tension or even break ties with loved ones.

How to Find Logbook Loans in Three Steps

Time Needed : 5 minutes
Check these steps to find out how easy it is to apply for a loan at Flexy Finance!
  • 1. Submit An Online Application Form​ for Logbook Loans

    Applying through Flexy Finance is always quick and easy. Simply complete our 1-2 page application form. You can apply on the go, or from the comfort of your own home. Better still, there are no calls or paperwork involved!

  • 2. We search a large panel of UK lenders

    We search a large panel of UK lenders in real time, so that we can deliver you an instant decision. Within seconds of applying you'll know if a lender has accepted you or not. Unlike banks, our lenders are able to issue loans to people from all different walks of life and accomodate a range of different credit scores. There's an option for everyone!

  • 3. Access The Cash

    The majority of lenders are able to deposit the cash direct to your account, within just 24 hours! We'll never charge you any fees and there is no paperwork to complete. There you have it, apply for up to £5,000 in the quickest and simplest way possible today

  • 1. Mobile, Laptop or Tablet.

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