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Debt advice when your car is at risk due to a logbook loan

Logbook Loan Debts overview

Logbook loans allow you to borrow money using your vehicle as security to ‘assure’ the loan.

The process involves you effectively providing your creditor with ownership of your vehicle until the credit has been repaid in full.

During the course of the loan you’re still able to use your vehicle as you normally would, with the average logbook loan lasting for a period between one and three years with a loan amount of between £400 to £5,000.

The advantages of using Logbook Loans as a credit solution

  • Logbook loans can be among one of only a limited number of options for those with poor credit.
  • Logbook loans are quick and easy to apply for and obtain, as they don’t usually involve any form of credit check.

The disadvantages of Logbook Loans as a credit solution

  • Logbook loans are an expensive form of credit, with APR rates that usually come in at 300% or more. This typically means that you’ll repay more than double the original amount borrowed.
  • Should you fail to keep up with your repayments you face the prospect of losing your vehicle, which could have serious implications for your home and working life.
  • If you’re stuck in a cycle of borrowing and using a logbook loan as a ‘last ditch’ solution, you have a higher risk of being unable to service your repayments.

Worried about debts that won't go away?

Debt help tips for tackling Logbook Loan Debts

  • If you’re struggling to meet your repayments, or your repayments are leaving you short to pay priority debts or living essentials, ask your logbook lender about re-working the loan to lower your repayments. Should they be able to do this, you should be aware that the duration of your loan will increase.

Priority debts include: mortgage repayments and loans secured on your home; rent; gas and electricity debts; council tax; certain payments ordered by the courts.

  • If you miss a repayment your logbook lender will contact you. If you don’t catch up, you’ll then be served with a default notice, which provides you with 14 days to bring the account back into good standing. If you fail to do so, your creditor may then take steps to recover the balance, including the repossession of your vehicle.
  • If your creditor refuses to re-jig the loan, or you’re struggling with multiple debts, research debt solutions here.
  • You should also get in touch with a debt charity for free, impartial advice as to what your best strategy may be.

IVAs – A potential debt solution for Logbook Loan debt

An Individual Voluntary Arrangement is a debt settlement scheme that helps those who aren’t coping with their debts.

While an IVA may come to late to address your finances in order to save your vehicle, it can offer promise of a debt-free future.To be eligible for an IVA your debts must amount to more than £5,000, which must be owed to two or more creditors.

*An Individual Voluntary Arrangement (‘IVA’) is subject to the customer meeting qualifying criteria and gaining creditor acceptance. Monthly IVA payments include fees and may differ to the example provided, based on the assessment made of your own personal circumstances – these fees will be clearly explained to you in writing by your IVA company. Debt write off amounts are subject to creditor acceptance and vary by individual customer based on their own financial circumstances, and are applied upon successful IVA completion.

Substantiation example, Someone owes £60,000, they pay £100 over 60 months which equals £6000, write off amount would be £54,000 which is 90% of total debt level. Upon submitting your details on this website we will pass your details to one of our approved partners as this website does not give any advice.

Free debt counseling, debt adjusting and credit information services are available from the Money Advice Service.

National Debt Help
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