Logbook Loans

Also commonly referred to as a V5 loan, a logbook loan is a type of secured bad credit loan. The collateral used in this type of loan is the borrower’s vehicle, and the term was derived because the borrower surrender’s the vehicle’s “logbook” to the lender. This means that the ownership is transferred to the lender, who can then legally repossess the borrower’s vehicle in the event of default. The borrower can get the logbook back only after the loan amount is paid off in full.
Unlike payday loans, you can borrow a greater amount of money with logbook loans because of the presence of collateral. The amount may vary depending on your vehicle’s make and model, and its value.
Logbook loans have repayment options between a few weeks to several months. They are pretty expensive and are designed for short term borrowing, because extending your term can be very costly in the end.
Logbook loan borrowers can still use their vehicle as normal provided that their repayments are up to date. However, before applying for a logbook loan, be sure to check your lender’s policy regarding late payments, because some might immediately seize your car with one late repayment.
Logbook Loan Advantages

  • Freedom to use the money in any way you like.
  • Few paperwork and easy requirements.
  • Money is available within the same day.
  • Easy application, which is done online.
  • You can continue to use your vehicle even while under the loan period.
  • There’s a chance to repair your credit over time, as you make your repayments in a timely manner.
  • Ideal for short term borrowing.
  • Cheaper than payday loans.
  • You can borrow a large sum of money depending on your vehicle’s worth.

Logbook Loan Disadvantages

  • There’s always the risk to lose your vehicle if you are late on your payments.
  • You must be the legal owner of the vehicle you intend to subject under the loan.
  • The vehicle must be insured and free of financing before it can qualify.
  • Can still be very expensive if repaid over a relatively long period of time.
  • Can ruin your credit score even further if you default or do not make on time payments.