Cheapest Logbook Loans in Kenya: A Comprehensive Guide

If you are in urgent need of cash, a logbook loan is one of the quickest ways to access funds by using your car as collateral. With numerous lenders in Kenya offering this type of secured loan, it is essential to compare options to find the most affordable and reliable provider. This guide will help you understand logbook loans, their advantages, risks, fees, and the best providers offering the cheapest logbook loans in Kenya.

What Is a Logbook Loan?

A logbook loan is a type of secured loan where your vehicle (car, van, motorbike, or tractor) is used as collateral. The lender temporarily becomes a joint owner of the vehicle until the loan is fully repaid.

Unlike asset financing, which helps you purchase a vehicle, a logbook loan allows you to borrow money against a vehicle you already own.

Who Offers Logbook Loans in Kenya?

Logbook loans are available from various microfinance institutions (MFIs), some commercial banks, and independent lenders. These lenders typically offer different loan amounts, interest rates, and repayment terms.

Top providers of Cheapest logbook loans in Kenya

1. Mogo Kenya – Offers up to 80% of the vehicle’s value with competitive interest rates and flexible repayment terms.
2. Platinum Credit – Provides fast logbook loans with minimal paperwork and same-day disbursement.
3. Momentum Credit – Known for quick processing and flexible repayment options.
4. Autochek Kenya – Offers some of the lowest interest rates with a straightforward application process.
5. Ngao Credit – Offers up to 50% of your car’s value with a fast approval process.
6. Zenka Finance – Provides competitive logbook loan rates with quick access to cash.
7. KCB Bank – One of the few commercial banks offering logbook loans at lower interest rates compared to MFIs.
8. FinCredit Kenya – Offers flexible repayment plans and quick loan disbursement.

Advantages of Taking a Logbook Loan

• Quick Access to Cash – Many lenders approve and disburse loans within 24 hours.
• No Credit Check – Most providers focus on vehicle ownership and valuation rather than credit history.
• Flexible Loan Amounts – Borrow up to 80% of your vehicle’s forced sale value (FSV).
• Use Funds as Needed – There are no restrictions on how you can use the loan.
• Continued Vehicle Use – You retain the right to use your vehicle while repaying the loan.

Key Considerations Before Taking a Logbook Loan

• Interest Rates – Logbook loans often come with high interest rates; compare lenders to get the best deal.
• Fees & Charges – Be aware of upfront fees, valuation fees, processing fees, and tracker installation costs.
• Loan Repayment Terms – Understand the repayment schedule and penalties for late payments.
• Risk of Losing Your Vehicle – Defaulting on the loan could result in repossession of your car.

Fees Associated with Logbook Loans

Besides the quoted interest rate, borrowers should be aware of the following fees:

• Processing Fee – Typically 2.5% or more of the loan amount.
• Vehicle Valuation Fee – Charged before approval and is non-refundable.
• Logbook Search & Transfer Fee – Paid to NTSA for ownership verification.
• Car Tracker Installation – Required by most lenders for loan approval.
• Comprehensive Insurance Requirement – If your car is not already comprehensively insured, you may need to purchase coverage.

Risks Associated with Logbook Loans

• High Cost of Borrowing – Interest rates and fees can make logbook loans expensive.
• Risk of Losing Your Vehicle – If you default, the lender has the right to repossess your car.
• Additional Charges – Late payments attract penalties, increasing the overall cost of the loan.

How to Choose the Cheapest Logbook Loan in Kenya

1. Compare Interest Rates – Look for the lowest rate possible to reduce your repayment burden.
2. Check Additional Fees – Some lenders have hidden charges that increase the total cost.
3. Read Customer Reviews – Consider feedback from other borrowers on service quality and transparency.
4. Consider Repayment Flexibility – Some lenders offer flexible repayment schedules to ease financial strain.

Conclusion

A logbook loan can be a quick and convenient way to access cash when you need it most. However, it’s crucial to compare different lenders to find the cheapest logbook loans in Kenya. Consider interest rates, fees, repayment terms, and potential risks before committing to a loan. By making an informed decision, you can secure a logbook loan that best fits your financial needs without risking unnecessary costs or losing your vehicle.