How the payment and APR are worked out
Logbook lenders usually quote a flat rate: interest is charged on the amount you borrowed for the whole term, not on the falling balance. The total to repay is the amount borrowed plus the flat rate times the years, shared across equal payments. Weekly payments are the months of the term times 52 divided by 12, rounded to a whole number.
The FCA says logbook loans typically have APRs of 400% or more. The APR here comes from the payments themselves: it is the rate per payment that makes them worth the amount borrowed, turned into a yearly rate, so it is far higher than the flat rate.
Worked example: £2,000 over 18 months
Borrowing £2,000 at a flat 120% a year over 18 months means 78 weekly payments of £71.79. The total to repay is £5,600.00, of which £3,600.00 is interest and charges, and the APR is 442.58%. If you pay monthly instead, the payment is £311.11 and the APR is 387.39%.
Cash Converters' representative example for Logbook Money is £1,300 over 18 months at 120% fixed, with an APR of 442.66%. Equal payments of £46.67 give 442.58% here. The lender rounds the payments and makes a smaller final one, which accounts for the small difference.
Worked example: settling after 26 payments
After 26 of the 78 weekly payments on that loan, 52 payments are left, which is £3,733.33 if you paid them all. The settlement figure on a 28-day settlement date is £2,003.13, so the interest rebate is £1,730.20. If the settlement date is deferred to 58 days, the figure is £2,242.40 and the rebate falls to £1,490.93.
On the monthly version, settling after 6 of 18 payments costs £1,982.28 with a 28-day settlement date.
How the settlement figure is worked out
Under the Consumer Credit (Early Settlement) Regulations 2004, the settlement date is 28 days after the lender receives your notice (regulation 5). Where the agreement runs for more than a year, the lender may defer it by a month (regulation 6), which is why you can choose 28 or 58 days. Payments that fall due on or before the settlement date are paid in full. The later ones are discounted back to that date at the loan's own rate per payment.
The method is the one used for monthly loans in the early repayment calculator. A weekly payment is treated as 7 days apart and a monthly one as 30. The lender's own settlement statement is the figure you would actually pay, so ask for one before you settle.
For an ordinary monthly loan, use the early repayment calculator.
Early repayment charges
Section 95A of the Consumer Credit Act 1974 caps what a lender can claim for repaying a fixed-rate loan early. The claim is allowed only when the early payment is more than £8,000, and is capped at 1% of it when more than a year of the term remains, or 0.5% when a year or less remains. A flat rate is fixed, so the calculator shows that maximum charge. It is £0.00 for the loan above and for most logbook loans.
We have not checked whether every logbook agreement is a regulated agreement. If you are unsure, ask the lender or the Financial Ombudsman Service. MoneyHelper can point you to free, confidential debt advice if you are struggling.
Use the right country page
A logbook loan is a UK product secured by a bill of sale. The FCA says the bill of sale arrangement does not apply to Scotland. In the US the equivalent is a title loan, usually a single payment after about 30 days.
For the US product, open the title loan payoff calculator.
Inputs for the logbook loan payoff calculator
How often you pay
Weekly or monthly, as your agreement says. Logbook loans are usually repaid weekly or monthly.
Settlement period
28 days, or 58 days if the lender defers the settlement date by a month on a loan longer than a year.
Amount borrowed
The cash you received, before interest and charges.
Flat interest rate per year
The yearly rate on your quote, charged on the amount borrowed for the whole term. 120% is one lender's example.
Term
The length of the loan in months. Weekly payments are the months times 52 divided by 12, rounded.
Payments already made
How many weekly or monthly payments you have made so far. It cannot be more than the loan has.
CALCULATOR QUESTIONS
UK logbook loan payoff calculator questions
Can I pay off a logbook loan early?
Yes. You can usually repay a regulated consumer loan early, in full or in part. Ask the lender for a settlement figure, and make sure the bill of sale is cancelled once you have repaid.
How much would it cost to settle after 26 payments?
On £2,000 at a flat 120% over 18 months, the settlement figure after 26 weekly payments is £2,003.13 with a 28-day settlement date.
What is the APR on a logbook loan?
The FCA says logbook loans typically have APRs of 400% or more. The example here gives 442.58% for weekly payments.
Why is the settlement figure less than what I still owe in payments?
Payments that fall due after the settlement date are discounted, which gives you a rebate of interest you have not yet used.
Can I lose my car?
Yes. Ownership passes to the lender under a bill of sale, and the lender can take the car if you do not repay.