How Risky are Logbook Loans?

Like other types of personal loans, logbook loans have its share of risks. According to many financial experts, logbook loans are risky for two main reasons. One is because of its cost and two is because of the possibility of vehicle repossession.


One of the controversies surrounding logbook loans is its high cost. The average rep APR for this type of personal loan is 400% or greater. Compared with traditional loans for people good credit, logbook loans are extremely expensive. Oftentimes, the amount of interest you’ll pay for is a number of times higher than your original loan amount.

Fortunately, there are now loan providers that offer a lower rep APR. In fact, some deals have rep APR of 200% or below. While it’s still not as cheap as other loans, the financial product has definitely been cheaper than it used to thanks to stiffer competition among providers.


Aside from the steep cost, logbook loans are often attacked because of the risk of vehicle repossession. It works just like other types of secured loans where you use your vehicle to avail a cash loan fast. In exchange, you agree that your lender can repossess your vehicle in the event of nonpayment.

Repossession is the biggest risk associated with logbook loans. But repossession is also the last resort lenders enact in case of nonpayment. If you haven’t been timely with your payments, most lenders offer a grace period to give you a chance to catch up. Only after you’ve failed to update payments will your lender recover your vehicle. The trick to avoid repossession is to make sure that you’ve planned your borrowing thoroughly. At the end of day, if you commit to paying your dues on time, you’d be able to overcome the high risks involved with applying for a logbook loan.