What is a logbook loan?
Key takeaways
With logbook loans (sometimes called V5 loans), you can generally borrow between £500 and £50,000.
Many logbook lenders don’t perform credit checks, so bad credit scores don't rule you out for being accepted.
You can drive your car while repaying the logbook loan but the lender owns it until its cleared.
What is a logbook loan?
Logbook loans, sometimes known as V5 loans, are short-term loans that are secured against your car. This means the lender will temporarily own your car until the loan is paid back and can take away the vehicle and sell it if you fail to make repayments.
You’ll still be able to use your car as long as you repay the loan. Logbook loans in the UK are available in England, Wales and Northern Ireland but not Scotland.
Logbook loans are an expensive way of borrowing and are best avoided in most circumstances. Here at MoneySuperMarket, we do not offer logbook loans.
How do logbook loans work?
When you take out a logbook loan, the process works like this:
Find a logbook loan provider
You can find logbook loans online or the high street. As the interest rates are typically far higher than with a standard loan, it’s important to compare providers and loans where possible.
Sign a bill of sale
In order to get a logbook loan, you have to sign a loan agreement called a ‘bill of sale’, which temporarily transfers ownership of your car to the lender.
If the lender registers this document with the High Court, they can repossess your car without seeking court approval. If the lender hasn’t registered the bill of a sale, they can’t repossess your car unless they go to court.
Show your documents to the lender
You’ll normally have to give the lender your car’s logbook or vehicle registration document – this is to prove you’re the registered keeper of the car.
Receive the funds
You should be able to get your money through a transfer directly to your bank account or even in cash. Your lender should give your information which clearly explains the loan agreement including loan length and monthly repayments.
Am I eligible for a logbook loan?
Eligibility requirements for a logbook loan will vary across lenders. But this is what is generally required:
You must be over 18 years of age.
You must have a UK bank account.
There must not be any car finance debt remaining on the car (or the outstanding finance must be low).
Your car can’t already have a loan secured against it.
Your car must be road-legal including being taxed, insured and with a MOT.
You must provide proof of regular income to cover repayments.
You must be the legal owner of the car.
The V5 logbook must be in your name.
How much can I borrow with a logbook loan?
How much you’ll be able to borrow with a logbook loan will vary across lenders. However, in general logbook loan providers are prepared to lend between £500 and £50,000.
Unlike with other loans, where affordability checks are made and the amount you can borrow is usually based on your income, credit history, or the value of other assets you own, with a logbook loan the amount you’ll be able to borrow will depend on how much your car is worth.
Are logbook loans expensive?
Logbook loans are more expensive than other loans because of their high interest rates. The average APR of a logbook loan is around 400%, according to the Financial Conduct Authority (FCA).
To put that in perspective, most secured loans have APRs below 10% and even the most expensive secured loans generally come in up to 13% APR.
Meanwhile, the cheapest rate on an unsecured personal loan available from MoneySuperMarket is 5.7% (as of April 2026).
What fees apply to logbook loans?
You may incur fees with a logbook loan if you want your money in cash instead of a bank transfer. Some lenders may charge fees of up to 4% of the loan.
If you are late making a repayment, you may also have to pay extra fees and this could impact your credit history negatively.
What are the pros and cons of logbook loans?
Advantages:
Can pay off your loan early: For other types of loans, you’ll likely face an early repayment fee if you pay the loan off early. However with logbook loans, you will usually not have to pay a penalty for settling your loan early. (This might not always be the case, so check with your lender).
You can borrow money quickly: One of the major benefits of a logbook loan is that you can get access to the funds faster than with other types of borrowing. Depending on the lender, you could even get the funds in an hour.
You could get access to more money: The logbook loan amount will depend on your vehicle. If you have a very expensive car, you could borrow more money. A logbook loan may let you borrow more than you could with a standard loan because the lender bases the amount on your car’s value.
Weekly repayments: Most logbook loans are paid back in weekly repayments, this might suit you better than paying back your loan every month.
Disadvantages:
Expensive: APR rates on a logbook loan can be as high as 400%, making them an extremely expensive way to borrow.
You could lose your car: If you can’t keep up with payments, you face the possibility of losing your car, as your loan is secured against your vehicle.
No direct debits: Some lenders may not allow you to set up a direct debit, this puts the responsibility on you to keep up with loan repayments which are often weekly.
Less financial protection: Logbook loans have less protection for you as a borrower than other loan types.
Risk of further debt: If you can’t keep up with repayments, you risk increasing your debt and impacting your credit score.
Can I still use my vehicle while I have a logbook loan?
Can I still use my vehicle while I have a logbook loan?
You’ll still be able to drive your car while paying back your logbook loan. You will only have to stop using it if you don’t keep up with the loan repayments, in which circumstances the lender will take ownership of your car.
Can I get a logbook loan with a bad credit score?
Because many logbook lenders don’t carry out credit checks, you could get a logbook loan with a bad credit score.
For the reason that the logbook loan is secured against your car, lenders know they can repossess your car if you can’t keep up with loan repayments.
This could be why they’re more willing to lend to borrowers with poor credit scores who might be rejected by high street lenders.
Although it might seem like a good thing to take out a logbook loan with bad credit, this carries a lot of risk. If you can’t keep up with payments, you risk your credit score plummeting further and losing your car.
If you are in debt or struggling financially, there are free debt advice charities and organisations that can help including StepChange, Turn2Us, MoneyHelper and National Debtline.
What happens if I can’t make my repayments on a logbook loan?
If you can no longer keep up with the repayments on your logbook loan then you face the prospect of losing your car.
The lender can sell your car to pay off the outstanding debt. If the value of your vehicle isn’t enough to pay off the entire loan, you may still be liable for the remaining balance.
If the lender repossess your car, they will have to send you a default notice first and you’ll have 14 days to respond.
What are the alternatives to logbook loans?
Due to how expensive and risky logbook loans can be, they are usually best avoided. Here are other options for borrowing money:
Secured loans
A secured loan lets you take out a loan against a secured asset, usually your house. With a secured loan you can borrow a large amount of money, however you run the risk of losing your home if you don’t keep up with payments.
Credit unions
Credit unions are an alternative to banks and building societies and are set up by people who have something in common; they live in the same neighbourhood, for example. A credit union might be ideal if you’re on a low income and need to borrow money for a short time.
Budgeting loan
These are loans from the government for people who have been receiving specific benefits for six months. These loans are interest free and you only pay back what you borrow.
Help from family and friends
If you are able to, you could ask your loved ones or close friends for a loan. This loan could even be interest-free, depending on the agreement you’ve made. However getting financial help from family and friends risks damaging the relationship if you’re unable to pay them back.
Other useful guides
Compare loans for with MoneySuperMarket
Finding the right loan is straightforward with MoneySuperMarket. Our eligibility checker tool can show you the likelihood of acceptance without impacting your credit score.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Frequently asked questions
Will a logbook loan damage my credit score?
Your credit score could be impacted by taking out a logbook loan. However, as long as you maintain your weekly payments and ensure you make them on schedule and in full, your score ought to improve.
But if you miss your repayments, you can almost certainly expect your credit rating to take a substantial hit.
Can I get a logbook loan on a motorbike?
Lenders are willing to accept motorbikes as collateral for logbook loans. But as with logbook loans secured against cars, you'll need to own the motorbike outright to be accepted.
Logbook loan providers will also offer loans secured against caravans and vans.
Author
Victoria Russell
General Manager - Commercial
Vikki has worked across financial services for over 20years, and for the last 15 years, created and nurtured a career within MoneySuperMarket Group, leading to her current role as General Manager for...
Reviewer
Rebecca Goodman
Personal Finance & Insurance Expert
Rebecca is an award-winning financial journalist with over a decade of experience writing for print and online media. Her mission is to take the jargon out of personal finance and to help everyone...
