A logbook loan is not just the day the money arrives. It is an arrangement that can last anywhere from 18 months to five years, so it is worth knowing what each stage looks like before you start. For the short version of applying, our how it works page has you covered.
Here we follow a Logbook Money loan from the first quote all the way to the last payment, including the parts people tend to ask about once they are partway through.
Stage 1: your quote
You start by telling us about yourself and your vehicle. With your consent, a soft credit search runs in the background. It has no effect on your credit score, and it means we can give you a personalised quote rather than a rough guess.
If a range of amounts or terms is available, you can adjust them and choose weekly or monthly repayments. You see the full repayment schedule before you confirm anything. Take your time here. Borrowing a little less, or over a different term, can make a real difference to how comfortable the repayments feel. A logbook loan is a costly way to borrow, so check the representative example on our calculator too.
Stage 2: checks and approval
Next, an underwriter looks through your bank statements and phones you to make sure the loan is affordable. We have a separate guide to what we check when you apply, so you know what to have ready.
Stage 3: signing and getting your money
Once the underwriter is happy, we email your credit agreement for you to read and e-sign. For most loans a signing agent then visits, usually within 3 working hours, to witness the Bill of Sale and take a photo of you with the car. The Bill of Sale is what secures the loan. It makes us the legal owner of the vehicle until you have repaid, while you keep it and drive it.
In Scotland it works a little differently. You sign a Hire Purchase agreement online and send us photos and documents instead of having a visit.
We then ring to confirm the bank account for your payout and the debit card for your repayments. The money goes by bank transfer and usually arrives within 24 working hours of your application, though the exact timing depends on your bank. You still have 14 days after the agreement is made to change your mind, by paying back the money plus interest for the days you had it.
Stage 4: the repayment months
This is the longest part of the loan and, for most people, the quietest. Repayments are collected weekly or monthly by recurring debit card payment. Your interest was fixed when you signed, so the amount does not change. You carry on using the car as normal, and you can read more about how you keep your car throughout.
A few habits help:
- Leave enough in your account on payment day, and let us know if your bank sends you a new debit card.
- Keep the car taxed, insured and MOT'd, just as you would anyway.
- If your income drops or something changes, get in touch with us as early as you can. The sooner we know, the more options there are. You can also get free advice from StepChange or National Debtline.
Stage 5: topping up or settling early
Partway through, you might need a bit more money, or find you are in a position to pay off early.
Topping up: depending on your circumstances, you may be able to add to your loan. You must be fully up to date with your repayments, and we never offer top-ups in the first 6 months. Borrowing more adds to what you owe, so give it the same thought as the first loan.
Settling early: you can settle at any time and get a rebate on interest. Ask us for a settlement figure. It includes one month's interest and shows exactly what you need to pay.
Stage 6: the final payment
When the last payment goes through, the loan is finished and ownership of the vehicle comes back to you. If you repaid well and ever need to borrow again, we may be able to offer you more, but there is no obligation at all. Some people choose to keep paying a similar amount into savings each month, so there is a cushion ready for the next unexpected bill.
This article is general information, not financial advice. For free, impartial help with your own situation, visit MoneyHelper.
Your car may be repossessed if you do not keep up repayments on a loan secured against it.
