World Library  
Flag as Inappropriate
Email this Article

Logbook loan

Article Id: WHEBN0031244416
Reproduction Date:

Title: Logbook loan  
Author: World Heritage Encyclopedia
Language: English
Subject: Consumer debt, Cash advance, Alternative financial services, Loans, Moneylender
Collection: Loans
Publisher: World Heritage Encyclopedia

Logbook loan

A logbook loan is a British term for a bill of sale securing a loan on a debtor's vehicle (with the lender retaining the vehicle's "logbook", or vehicle registration certificate). Logbook loans are secured in a similar way to pawn broking logbook will be retained by the lender until the loan and any outstanding interest is repaid. The structure of the loan means that the lender can repossess the debtor's vehicle without a court order.[1] This distinguishes it from a car title loan, as used in the United States.

Logbook loans have gained notoriety in the United Kingdom due to their often very high interest rates and potentially unfair terms and conditions. Logbook loans are used for people that have bad credit that need cash quickly. Logbook loans can be completed in as little as 15 minutes. The applicant must have proof of a steady source of income to be approved for a logbook or V5 loan.[2]

Logbook loans secured by a Bill of Sale are generally for amounts ranging from £500 to £2,000 (sometimes more). The average across the industry is estimated to be £1,000 (based on lenders’ submissions to the consultation), typically repaid over a 6-18 month period. APRs vary according to lender but tend to range between 200% and 500%, which is similar to other high-cost credit products where loans are taken out over a similar period (e.g. home credit).[3]

In December 2009, the UK government announced a consultation on whether to outlaw logbook loans.[4] A Logbook Loan may only by issued by a company if it holds a "Consumer Credit Licence". The loan is secured using legislation from 1878 known as a Bill of Sale. This legislation allows companies to seize the asset i.e. in the case of non repayment of the loan. Following the consultation, logbook loans were not outlawed, but a voluntary code of practice was introduced.[5]

See also


  1. ^ "MLR3C2126 - Legislation: Log Book Loans". HM Revenue & Customs. Crown. Retrieved 1 August 2014. 
  2. ^ "Credit nation: Debt levels reach an all time high". Retrieved 1 August 2014. 
  3. ^ "Government Response to the Consultation on Proposals to Ban the Use of Bills of Sale for Consumer Lending". Department for Business Innovation & Skills. Jan 2011. p. 48. Retrieved 1 August 2014. 
  4. ^ Bachelor, Lisa (2009-12-22). Logbook loans' to be outlawed"'". The Guardian (London). Retrieved 2010-04-26. 
  5. ^ "Citizens Advice evidence on bill of sale consumer lending". The National Association of Citizens Advice Bureaux. April 2014. p. 2. Retrieved 11 August 2014. 

External links

  • Citizens Advice Bureau UK on Logbook Loans
  • Consumer Affairs
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.