Financial experts refer to logbook loans as serious financial traps that people rush to unknowingly. While this argument is often contested, the truth is that the risks and dangers that come with logbook loans are immense. The interest rates are very high and often reach up to 400% APR while the risk of getting the car recovered is equally high. Well, this is not all. If the car is sold for a figure less than the debt balance, the lender can sue you to recover the remaining amount.

While the main focus by any one borrowing a logbook loan should be establishing a prudent repayment plan, it is advisable to be prepared for the worst. If you find the financial situation is still dire, it is advisable to try and salvage the situation before everything get out of control. What can you salvage if it becomes difficult to continue servicing the logbook loan?

Engage the lender at the earliest possible instance to demonstrate commitment to clearing the loan

If you notice that the financial situation has grown from bad to worse, do not let things get out of hand. For example, if you lose employment and do not have another reliable source of income, it will be difficult to keep servicing the loan. By engaging the lender at the earliest possible instance, you are sure of avoiding penalties for late repayment or defaulting. The lender will switch to the next gear of how he will recover his cash. Note that the lender only wants to get back the total amount you could have paid and not making a profit.

Get the current value of the car and look for a buyer

If you leave the process of recovery and auction to the lender, the chances are that the car will be sold for the loan balance as opposed to its entire value. For example, it will be unwise to leave the process of disposing the car to the lender because you borrowed £2000 while the car is worth £12000. The best thing is getting the actual value of the car and look for a buyer. Remember that it is illegal to sell the car because the ownership was already transferred to the lender.

Work with the lender to inform him of the willing seller

If you have a willing buyer, talk to the lender and inform him so that he can process the ownership transfer. By understanding the buyer and having negotiated for the price, you stand to benefit in the following ways.

  • The lender will not charge you extra penalties for recovery and to auction the car
  • Because you understand the price, the lender will only take what is enough to clear the loan. The extra cash will revert to you.
  • You can avoid the stress of defaulting and falling deeper into financial trouble.


Every logbook loan borrower should be cognizant of the numerous risks that come with the credit. To avoid reaching the precarious situation of having the car sold to clear the loan, it is advisable to borrow what is just enough, repay as soon as possible, and start working on your credit score.