Are Logbook Loans Really that Bad?

If you believe all the negative publicity that surrounds logbook loans you might be surprised that there are any companies left in business in the industry.

Logbook loans don’t have a great name, but then neither do Payday loans in the UK either, however people are still using both forms of finance readily across the country.

If you search for logbook loans on a review site such as Trustpilot you will come across businesses such as Varooma that have great ratings because they have high customer satisfaction.  Hundreds of people are saying that they took out a logbook loan and were happy with the service.  A far cry from what you might read in the press about V5 loans.

However there is some seriousness to the matter, despite the good reviews it still seems that poor tactics are still used by some lenders to intimidate borrowers and make extra money.  It is a shame that these companies still exist because it’s an outdated way of doing business and in the long term won’t do them any good.

The Financial Conduct Authority has taken charge of the industries’ regulation and will come down hard on any lenders not sticking to their guidelines.  It is now a no win situation for these companies, some have a very bad reputation already and following regulation they will have to either cease trading altogether or pay a large fine.


Logbook loans generally only become bad when people borrow more than they can afford to pay back.  In a smaller way it is similar to the credit crunch situation in 2008 when mortgages had been handed out to people without assessing their ability to pay back the loans.  In those cases it was the banks as well as the customers that suffered, with V5 loans it seems it is just the customers because they have to put up with their cars being repossessed.  Below is an interesting video about credit ratings which are a cause of so many people seeking logbook loans.

If someone borrows using a logbook loan and pays it back early without incurring lots of interest they are not getting a bad deal at all, in fact it can be quite a good deal because they may not have been able to secure the money from anywhere else.

It takes a website such as Logbook Loan Advice to independently set out all the options consumers have in the industry.  By making it clear that there are different lenders who all have different rates and different ways of doing business puts the consumer in more of a position of power than ever before.

There are plenty of comparison sites out there for other types of personal finance so it was about time that consumers were able to compare all lenders on an equal basis.


Pros and Cons of Logbook Loans

OrangeTaking a logbook loan out can be practical and an easy solution for your cash- flow problems. I have just highlighted a few Pro’s and Con’s of logbook loans:

The Pros Of Logbook Loans

>Logbook loans have an inviting feature which is a fast approval system. It is brilliant if you want to skip visits to a traditional lender and will guarantee same day approval, you can have money put into your account between 2 – 24 hours of applying/ being approved.

> It’s also great for those who have bad credit records. It can be hard or even feel impossible to borrow money from any lender if you don’t have a proven track record. Logbook loans provide financial assistance to those who have a poor or non existent credit history which will otherwise be rejected if they sought help else where.

> In order to qualify you only need to be 18 years old, be a resident in the UK, prove that you are a legal owner of the vehicle with a logbook or V5, proof of ID, billing address and proof of income.

> You also get to keep your vehicle with a logbook loan which is another attractive option as you still get to go to work and get paid in order to pay your loan back rather than having to commute.

> If you are currently not working but are on benefits and are confident you can pay the loan back and are willing to share how you can repay this, some lenders may be fine so apply for the loan and see if you are accepted.

>Most lenders will come to the comfort of your home, you will not need to worry about where the lender is based as they will send out an agent to you at your convenience in order to finalise your paperwork.

>You can save money on your logbook loan by paying it back earlier as you will only be charged interest for when the balance is outstanding.

> Logbook loans can be paid from the period of one week to 18 months. Which it makes it easier to make it a flexible period of repayment.

> Even though most logbook loan lenders have a high interest rate they are usually lower than an unsecured loan. This is usually because the rate of default on these type’s of loans are generally lower and most lenders will feel more secure knowing they have security in case of default with payments. The interest rate is considerably lower when compared to an unsecured loan and the terms of the contract are usually less extreme too.

The Cons of a logbook loan are:

> Logbook loans, like most type of debts have their disadvantages. Being that you can risk having your vehicle repossessed if you fail to keep up with the payments.

> Depending on the lenders terms and conditions you can usually borrow between 50 – 70 % of the value of your vehicle worth.

> Where the interest rates are so high, you shouldn’t consider this loan for a long term.

> You will need to have the vehicle fully insured before you can be accepted for a loan. The company will not be held responsible if anything was to happen to the vehicle during the loan period, it is up to the individual to make sure you are fully covered by the insurance.

> Logbook loans may or may not be the best option for you it is worth shopping around for the best deals in order to save money and time.

How to Budget?

Clip Board

Here are a few things to consider when your are taking your first steps into controlling your finances and getting them back on track! Hopefully this will help you to see what cash comes out and what cash comes in so its easier for you to make sure you’ve covered for everything you need to pay. As most bills tend to be paid at the end of the month it would be wise to make your figures in your calender monthly.

Firstly jot down everything you receive monthly, including your wages, benefits, pension etc. If some of your income is paid weekly add it all up to the full amount you would receive monthly. To work this out you can multiply your weekly number to 52 and then divide it by 12 and this will give you your calender monthly budget.

Make a note of all your bills you have going out every month for example your mortgage, rent, utility bill’s. If you are not sure to what you are spending your money on, try writing it all down. Also keep aside payments for things you don’t pay for very often for example things you only need to pay for once a year, this could be car repairs or birthdays.

Now you have written everything down you can see a clearer picture of where and how you are spending your money. Whatever you have left over at the end of the month divide it into 4 and try to stay within that weekly budget. If your spending more money than you are taking in than you have a budget deficit. If you are in this situation then I would suggest going through your list and seeing what you can cut back on, for example your utility bills, are you on the cheapest provider in your area?

Today you can find all the competitive rates with just a click of a button and would more than likely get a cheaper package on line. Another good way of cutting back costs would be bring in your lunch or snacks in to work instead of buying already made meals, yes it is only a few pounds but you would be surprised at how much it amounts to at the end of each month.

Are Payday Loans Really that Bad?


What is a payday loan??

A payday loan is a short term loan with a high interest rate. This loan is used for small purchases until your next pay day. Usually you could borrow anything between £50.00 to £1,000.00 to tie you over until your next pay check. Payday loans are known to not have any interest rate caps, so the APR will be very high. They are known to be as high as 4,500% and could be even higher.

If you find yourself in a financial pickle  you may consider taking out one of these loans. You may be asking yourself, are they a good idea? The answer to this is that it all depends on the individual, are you in a situation to repay the loan back in full? Like any loan there are advantages and disadvantages.

If you are considering taking out a loan here are some of the advantages and disadvantages of this type of credit and maybe help you figure out if this is a good idea for you or not.

The advantages of a payday loan would be that you don’t need to have brilliant credit history to qualify, secondly you don’t need to secure anything, you just need to show that you have steady job with regular income and you will need to show that you have been with the same company for a minimum of 6 months.

The disadvantages of a payday loan are that loan debts are caused by the high interest rates. If you do fail to repay your loan you’ll owe the outstanding balance of the loan plus the interest and any of the fees or charges from the lender. Avoid having your loan rolled over into the next month as the debt will grow and it will attract more interest. By allowing this you will allow the debt to grow and you will attract added interest until you have cleared the loan. Before you know it you could be paying back more than double what you originally asked to borrow.

And lastly ask yourself, do I really need the loan? Where the APR is high on most short term loans you should never use one for larger expenses whether it be a vacation, Christmas or home improvements. Ask yourself, can I save for this event over a few months? How about starting by creating a budget.

I would Strongly advise to stay away from short term loans if you are struggling with debt problems as they can make your financial situation worse.

Are Logbook Loans Worth Considering?

Car Salesman and a Customer

If you are considering taking out a logbook loan then it would be wise to make sure you do your research . The problem with high interest, short, quick cash loans is that not only are you putting your car at risk but could possibly be putting your house at risk too.  But if you were to fall back on one payment, it is very easy to spiral out of control  from that one late payment. If you do owe money elsewhere and are pushing towards a logbook loan, to repay your loan elsewhere that you know you will be unable to pay too could be making things worse.

Some logbook loans company’s will try to help you come to an arrangement to help you pay your loan back as it works better for them, the longer you take to pay this back, means you are paying more interest. I once heard of a horror story involving a logbook loan agreement, which contained the provision that the lender could break the doors and windows and allow access on to the premises to where the vehicle was stored.

On the up side of things it is quick cash and if you have got the money to pay back the full loan including the interest within months then it is a good way to get access to quick cash. I cant stress enough to fish about as some lenders APR is as little as 178.0% and as high as 465.0% or even more. Also the value of your vehicle is determined by a loan officer or agent who inspects your vehicle. This is not by the market value, the decision will be made on the basis of this valuation.

When considering taking out a loan whether it is a logbook loan, a payday loan or any other loan, make sure to read all the terms and conditions carefully, and if there is anything you do not understand make sure to find out what it means as it could be very important and potentially cost you.

Here are some quick guidelines to what you may need in order to meet the criteria for a logbook loan. Check out what the chosen lender’s requirements are, as each lender may have a  different criteria you will need to meet:

> The vehicle should be less than 10 years old, unless it is a prestige car with some value to it.

> You must be able to show a regular income, self employed people are also considered.

> You will need to have the vehicle insured and have a full valid MOT certificate.

>The vehicle must have little or no finance to be accepted for a logbook loan.

> The logbook must be in the name of the person who is wanting to take out a loan.

What are Logbook Loans?

Pink Car

Logbook loans are short term loans that use your vehicle as security. You would hand over the vehicles logbook or vehicle registration to the lender at the ‘bill of sale’. These documents prove you are the registered keeper of the vehicle. Logbook loans are extremely popular due to the flexible nature of the loans. When applying for these loans unlike banks, you will not need to explain how the cash is being used.

You will be signing a ‘bill of sale’ which means that the lender owns your vehicle temporarily until you have paid the loan back in full. The vehicle stays with you providing you stick to the terms of the loan. The bill of sale document is recognised by the law in England, Wales and Northern Ireland. This documentation will only be accepted in the High Court providing the lender is registered with the High Court. If the lenders want to repossess your vehicle they will need the courts approval. It would be wise to check if the bill of sale is registered.

Logbook loans are loans that promise fast cash with no credit checks needed. You are able to apply for a loan via the internet or high street. You would usually be able to borrow anything between £500.00 – £50,000.00. Depending on each individuals circumstances and the value of your vehicle and depending on the lenders policy, it could be anything between 50% to 70% of the value of your vehicle.