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Why logbook loans are better than payday loans

No doubt, logbook loans and payday loans are the most popular loan facilities for individuals with a poor credit rating. These loan instruments make it possible for UK citizens with a less than average credit score to get credit access without having to worry about credit checks. There are those who prefer payday loans and there are those who prefer applying for a logbook loan. In this article, we are going to shed light on why logbook loans are better than payday loans.

Access to a huge amount of money

There is no denying that payday loans cap the maximum amount they can advance to a customer at somewhere around 1500 pounds. This, of course, makes it unfavourable to individuals who need a substantial amount of money to say, pay off a medical bill or simply to expand their small businesses. With a logbook loan, you can apply up to half the value of your vehicle. You therefore have access to a substantial amount of money under a logbook loan as compared to a payday loan.

Longer repayment period

With a payday loan, the requirement is that you clear the outstanding amount on the next payday. This, in essence, puts too much pressure on you not to mention the penalties and fees when you are unable to clear the loan on the prescribed date. A logbook loan, on the other hand, has a repayment period spanning 78 weeks which essentially gives you flexibility. You also get to decide how frequent you wish to be making repayments. Depending on how comfortable you are, you can be making repayments weekly, bi-weekly or monthly.


Logbook loans are secured loans while payday loans are unsecured. The average APR for a logbook loan is around 400% while the average APR for a payday loan is 1000% and above depending on the lender you are doing business with. In this regard, it is correct to say that it’s much cheaper to apply for a logbook loan than it is a payday loan.

All said and done, the choice between the two boils down to preference and the cash you need at any given moment. It would be foolhardy to risk your car for a 200 pounds loan. The best course of action in this regard would be applying for a payday loan. It is always advisable to make prudent financial decisions prior to taking out a loan be it a payday loan or a logbook loan.