How do logbook loans work

The bill of sale must be registered to the High Court by the lender if it wishes to repossess your vehicle. You can check if this has been registered by applying to the Royal Courts of Justice. Logbook loans are only available in England, Northern Ireland and Wales.

In Scotland, you may be offered a hire purchase or conditional sale instead. Best UK car insurance providers. Best commercial vehicle insurance providers.

The CCTA is a trade body that has a code of practice for those lenders that use bills of sale as part of their lending. When you use a lender that is a member of the CCTA, it should follow the rules set out under its code of practice, and these are more beneficial to consumers than the standard requirements under law. This includes a requirement for members:. Find out which lenders would accept you for a personal loan.

This service is provided by our preferred loans broker Loans Warehouse. No existing finance — you cannot owe any money for the vehicle. Get quotes for logbook finance — look for lenders that are members of the CCTA. Sign the documentation — this includes signing a loan contract and bill of sale. If you are a homeowner and looking to borrow a larger sum of money, you could consider a secured loan against your property.

Alternatively, for those seeking a smaller amount, a personal loan may be a better option. A bill of sale is a certificate that agrees the transfer of ownership of your vehicle to the logbook lender and allows you to continue to use it.

No, while you have your logbook loan outstanding with the lender, you do not own the vehicle and therefore cannot sell it. If your logbook lender is a member of the CCTA, then your car can only be repossessed if you have missed your last two monthly payments or four weekly payments and cannot agree a repayment plan with your lender.

The lender must comply with the Consumer Credit Act and send you an arrears notice and a default notice before ending the agreement to repossess the vehicle. You have 14 days from the default notice to repay your missed payments to stop the repossession process. Your lender can repossess your car without having to go to court if they have chosen to end your agreement and they have a bill of sale registered.

Depending on the terms of the agreement, they may be able to access a locked premises or garage to obtain the vehicle. This means they can ask bailiffs to remove your car. All logbook lenders must wait a minimum of five days before selling your car and 14 days if they are a member of the CCTA. After the lender repossesses your car, they must sell this for the highest market price they reasonably can. What are logbook loans?

Will I qualify? Is my car suitable? You can get the answers to all of these questions and more here…. Logbook loans are a method of borrowing money that use your car or vehicle as security. Using your car as security against your loan means that you can get a better interest rate compared to some other forms of credit. The amount you can borrow depends on the trade value of your car — the more that your car is worth, the more you can borrow against it.

The amount you can borrow also depends on how much you can afford to repay each month. To apply for a logbook loan you must:. Tool Couch to Financial Fitness. Calculator Baby costs calculator. Calculator Mortgage affordability calculator. Calculator Mortgage calculator. Money troubles. Calculator Pension calculator. Calculator Workplace pension contribution calculator.

Tool Find a retirement adviser. Calculator Redundancy pay calculator. Home Everyday money Types of credit. Everyday money Types of credit. Logbook loans. Getting your loan Paying the loan back How much does a logbook loan cost? How do logbook loans work? Logbook loans are available on the high street and on the internet.

Taking out a logbook loan in England, Wales or Northern Ireland. Logbook loans are used only in England, Wales and Northern Ireland. The law only recognises a bill of sale if the lender registers it with the High Court. Find out how to check if a bill of sale is registered on the National Debtline website. Back to top. Getting your loan. Most firms now use electronic payments to transfer the money into your account.

Paying the loan back. Is your household income getting squeezed? Check you are receiving all the benefits or grants you might be entitled to. How much does a logbook loan cost? Cons of logbook loans. The interest charged is much higher than on unsecured loans from mainstream lenders, so you could struggle to pay back what you owe. What to think about before taking out a logbook loan. Logbook loan lenders might ask for weekly payments. How much you can borrow depends on the value of your vehicle.

A reputable lender will ask you to get it independently valued. If your vehicle is sold. A logbook loan company can take you to court to get this money back. Alternatives to logbook loans. Credit unions. Read our guide Borrowing from a credit union. Help from the government.

Getting help with debt. Need someone to talk to about your finances? Was this information useful? Yes No. Thank you for your feedback. Share this article. Email Facebook Twitter. More options. Other lenders may offer other options such as cash or a cheque. After paying off the loan, the car ownership is transferred back to you. This is much longer than you get with a personal loan. This reduces the interest on the remainder of the loan.