By definition, a logbook loan is very similar to a secured loan. Similar to vehicle finance except that you will borrow the money against the value of the car.

Logbook loans can range from between £500 to £5,000, depending on the value of the car. You are required to hand over the registration or logbook documents when setting this up, meaning that the company will then own the car until the loan is repaid.

Interest rates are on par with that of payday loans, making them very expensive to repay. If you become unable to keep up with the repayments, the lender can then take the car from you.

This type of loan is only available in England Wales and Northern Ireland. If you are offered a logbook loan in Scotland, it is more likely to be a hire purchase agreement or a conditional sale.