Logbook Loans: The Do’s and Don’ts

logbook loan

When financial emergencies arise, logbook loans can be a valuable resource for obtaining quick cash in Kenya.

However, it’s crucial to approach them with caution. To help you navigate the process successfully, we’ve compiled a list of essential do’s and don’ts when applying for a logbook loan.

By following these guidelines, you can make informed decisions and safeguard your financial well-being.

The Do’s

1. Do Your Research and Compare:

Before committing to a logbook loan, spend some time researching different lenders. Compare interest rates, loan terms, and customer reviews.

By doing research you can identify reputable lenders that offer favorable loan terms.

Different micro finances and lenders offer different terms on their logbook loans. Lenders in Kenya charge interest rates of between 2% to 10%. The repayment period also varies, with some lenders offering as long as 48 months.

For example, Ngao Credit offers an interest rate of 3.5% and a repayment period of up to 24 months.

2. Assess Your Ability to Repay:

Before taking any loans, it is important to make sure that you will be able to repay This includes considering your current income and expenses, as well as your future financial goals.

Find out how much you can comfortably repay each month without straining your budget. Be realistic and choose a loan amount and repayment term that you can pay back.

3. Read and Understand the Terms:

You should review the terms and conditions of the logbook loan agreement. Make sure that you understand them first before taking a loan.

Pay close attention to interest rates, repayment schedules, penalties for late payments, and any additional fees.

You can always ask about:

  • Upfront fees
  • Valuation fees
  • Car tracker
  • Insurance requirements
  • Logbook search + discharge fees
  • Interest rates

Always seek clarification on anything you don’t understand before signing any documents.

Also, read All you need to know about Logbook loans

4. Maintain Regular Payments:

Once you’ve secured a logbook loan, make timely payments as agreed upon in the loan agreement.

Consistent payments not only prevent late fees and penalties but also protect your vehicle from the risk of being repossessed

5. Talk to the lender in case of difficulties in repayments

If you encounter any difficulties in repaying the loan, don’t hesitate to communicate with your lender. They may be able to provide alternative repayment arrangements or solutions to prevent default.

Open and honest communication is key to resolving any issues or problems. Some lenders such as prioritize having a long-lasting relationship with their customers and will often restructure your debt.

That is one of the ways lenders demonstrate their commitment to supporting customers through challenging financial circumstances.

The Don’ts

1. Don’t Borrow More Than You Need:

While it may be tempting to borrow a larger amount, only borrow what you genuinely need. Taking on excessive debt can lead to financial strain and increase the risk of default.

For example, if you only need Ksh 100,000 but you find out that your car logbook qualifies you for a loan of 400,000, do not make that impulse decision and borrow the entire amount.

Borrow responsibly to ensure a manageable repayment plan.

2. Don’t Ignore the Fine Print:

Many people don’t read the fine print in agreement documents, but it’s important to go through it.
Reading the fine print helps you understand all the requirements and conditions involved. Don’t miss out on important details – take the time to read and understand the fine print!

logbook loans

Hidden clauses or undisclosed fees can lead to unpleasant surprises down the line. If you have any doubts or concerns, seek clarification from the lender before proceeding.

3. Don’t Be Late or Default on Payments:

Remember, being punctual with your payments is not just about meeting deadlines – it’s about maintaining a healthy financial track record and building a solid credit history. Late payments can have consequences such as late fees and penalties.

Failing to make loan repayments can have the severest of consequences, vehicle repossession.

Prioritize loan payments to avoid these negative outcomes. If you foresee difficulties, seek assistance from financial advisors or get in touch with your lender. They may help you by restructuring your debt.

Debt restructuring means giving you more time or changing the way you pay back the loan. It helps you manage the payments better so that you don’t get overwhelmed.


Logbook loans can be a lifeline during financial emergencies, but it’s important to approach them wisely.

By adhering to the do’s and avoiding the don’ts outlined in this article, you can take a logbook loan with confidence and safeguard your financial stability.

Remember, responsible borrowing and informed decision-making are key to successfully managing your financial future.

To know more about Ngao Credit logbook loans click below:

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