Why logbook loans are a necessary evil

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No doubt, the internet is laden with arguments for and against logbook loans. Proponents of logbook loans see it as a wonder product, a means through which they have access to credit irrespective of their poor credit rating. On the other hand, opponents of logbook loans term it risky and a form of extortion going by the high interest rates associated with. While there is some merit from both the proponents and opponents of logbook loans, one thing that we can all agree on is the fact that logbook loans are a necessary evil.

Let me try to paint a picture for you. We all know that credit checks are a standard procedure when a person seeks to apply for any kind of credit. Now take a moment to imagine a situation whereby you urgently require credit for whatever reason but cannot be approved by any high street bank or financial lender because of the state of your credit history. Sucks, right? Unfortunately, this is an all too familiar experience to the majority of UK citizens struggling with bad credit rating.

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While in the past majority of UK individuals with a poor credit rating resigned themselves to fate and hoped for the best, the introduction of logbook loans changed the narrative for the better. In other words, logbook loans gave those with a poor credit history a new lease of life. Perhaps, you are wondering what a logbook loan is. Well, from its name, this is a type of credit facility that is secured against a person’s car. In short, if you do not own a car, you cannot be considered for a logbook loan.

Of course, it is easy to think that you can set up any car as collateral and be considered for a logbook loan. This is not usually the case. There are indeed exceptions. For one, logbook loan lenders insist that the car you wish to avail as security should be legally registered in your own name. In other words, you cannot use your spouse’s car, your parent’s car or a colleague’s car as security for a logbook loan. You must be the legal owner and the said car should not have any type of financial attachment to it not to mention that it must be in good condition.

That said, the requirements for applying for a logbook loan are pretty simple. You must be a United Kingdom citizen, own a car registered in your own name and be a person of sound mind above the age of 18 years. If you meet the aforementioned, you need not worry about the state of your credit history as the car acts as collateral. Should you be unable to meet the end part of your bargain, the lender can always dispose off your car and recoup their money.


In light of that, why are logbook loans a necessary evil? Well a lot of people are repulsed from logbook loans because of the fact that they are an expensive way of availing credit. To some extent they are right considering that the average APR for logbook loans is 400%. However, think about it. If you have bad credit and cannot avail any credit because of your poor credit history, logbook loans are your best bet. Consequently, logbook loans accord you an opportunity to rebuild your credit history because the only way you can do that is by diligently servicing your loan without default. Of course, this will gradually improve your credit score status. If you have no credit history to your name and face problems availing credit because high street banks have no way of telling how responsible you are with credit, look no further than logbook loans!

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