What to think about before taking out a logbook loan

When you take out a logbook loan, you’ll usually be asked to hand over your vehicle’s logbook or vehicle registration document.

These are the documents that prove you are the registered keeper of the vehicle.

But even if you don’t, you’re still handing over ownership of the car until the loan is repaid.

A few factors you need to consider when taking a logbook loan:

  1. The APR can be very high, so it is best to pay it off as quickly as possible.
  2. If you’re not sure how much you’ve paid back, ask for a statement of how much you owe (called a ‘statement of account’) which the lender must give you.
  3. How much you can borrow depends on the value of your vehicle. A reputable lender will ask you to get it independently valued.
  4. Even if the vehicle has existing finance against it, you might still be able to get a logbook loan, but generally only if your existing loan agreement is coming to an end and the outstanding amount is low (and you’ll need to get permission from your existing lender first).