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5 Ways to Successfully Repay a Logbook Loan
5 Ways to Successfully Repay a Logbook Loan
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Money Management

5 Ways to Successfully Repay a Logbook Loan

Doris Kendi
April 20, 2022

A logbook loan can come in handy in situations when you need a substantial amount of cash within a short period of time. However, this convenient medium that helps you when you are in need also needs paying off. 

Paying off any kind of debt needs a strategy. There is no scarcity of tales of people who either lost their vehicles or who had to sell off some other asset after failing to properly plan for their logbook loan repayment. 

Before taking a logbook loan, you need to be sure you can repay it comfortably. Yes, sure, - this goes for all other types of loans. Defaulting, late repayments or incomplete monthly payments will typically come with unfavourable consequences for the borrower. 

Here are some tips and tricks that can potentially help you ease your way into successfully repaying your logbook loan in time and in full. 

Understand the Repayment Schedule

Repayment planning starts even before you take the loan. So before you sign on the dotted line, ensure you understand how much you need to pay including all the associated terms and fees

Ensure you know:

  • The instalment amount. Understand how much you need to pay on every instalment. Also, ask the lender if the instalment could increase and what could trigger the increase. 
  • Late payment penalties. You need to know how a late payment could affect the loan and your payment plan. Are there penalties for late payment? What percentage is the penalty? How late is too late before you are declared to be in default? 
  • Other fees. Are there any additional fees that you need to pay monthly? For example, some logbook loan lenders charge a monthly car tracker fee of between Ksh1,400 and Ksh2,000. 

Understanding all these charges forms the foundation of whether you can successfully pay back the loan - and on time. When you have a full grasp of how much and when to pay, you reduce the chances of defaulting. 

Also read: Logbook Loan Fees and Terms; All You Need to Know 

Make the Loan Repayment a Priority

A clear repayment plan is the foundation of timely and effective loan repayment. So, create a comprehensive and practical budget to help guide you through your loan tenor. Typically, this process starts even before you apply for the loan and should continue all the way until you complete repaying the loan. 

Start by analysing your income and tracking your expenses. Once you have a complete grasp of how your finances, try to find:

  • Ways to increase your income. The larger your shovel, the faster you can dig. Increasing your income streams can create more disposable income and allow you to clear the debt more quickly. You could even sell things around the house that you no longer use or start a side job to help generate more income. 
  • Ways to reduce your expenses. Be honest with yourself about your daily habits and spending, then make the necessary lifestyle changes. This will help free more money to put towards the debt repayment. 
  • Pay the loan first before anything else - while for someone who is not in debt, the very first thing to do is ‘pay yourself first’, if you are servicing a loan, you want to make the instalment payment first before budgeting for the remainder. This way, you will not find yourself accumulating late fees, or going into default - which can come with hefty consequences. 

Also read: Are You Stuck in a Debt Cycle? Here Are 6 Tips to Help You Break Away

Put Any Extra Income Towards the Debt

Putting in more than the minimum amount on a loan payment is extremely beneficial to reduce the time that it will take you to pay off the loan - this is especially great if the interest structure is reducing balance. 

This could be as simple as paying a little bit more every time you pay an instalment or just paying back an amount every time you get some income (even in between instalments.)

The best way to achieve this is to put any unexpected or extra income towards repaying the loan. For example, if you receive your yearly bonus from work, you can use this money to repay the loan and reduce the loan tenure.

Alternatively, you can adjust your budget by reducing personal expenses so you can put more money into repaying the loan. 

However, ensure to discuss with the lender before you pay more than the pre-agreed instalments. It is possible that some lenders may charge an early repayment charge - you must be aware of this when negotiating the loan so that you can negotiate for a more favourable term. 

Keep the Option of Refinancing Open 

Also, consider loan consolidation if you have more than one loan.

If you have more than one loan, interests can pile up. For instance, if you have a few digital loans, a bank loan and a logbook loan, taking a loan from your SACCO can help repay all these loans and leave you to repay a single lender. 

Debt consolidation comes with many advantages: 

  • In some instances, it helps pay back the logbook loan faster and, therefore, can help reduce your financial burden in the short term. 
  • Debt consolidation makes it easier to manage your liabilities as a single unit.
  • It can benefit your credit standing as it can help lower the expected monthly repayment amounts.
  • It reduces your stress levels because you will not be getting dozens of calls from different debt collectors.

Also read: Feeling Financial Fatigue? 5 Steps to Get Control of Your Money.

Don’t Wait Until You are in Default

Logbook lenders will do whatever it takes (as stated in the loan agreement) to recover their loan balance in case you default. In this case, they might need to repossess your vehicle and dispose of it.  But the real truth is that most lenders would prefer to work out a payment plan with you instead of going through the hustle of repossessing and disposing of your car. 

So, keep your eye on the account. If you notice that you are falling back on payments, do not wait until it is too late. Take the time and talk to your lender. 

The lender might give you a grace period until you are in a position to resume payment or even allow you to service the interest-only until you are able to resume paying back the principal amount.


A logbook loan can be a knight in shining armour - especially in an emergency. It is easily accessible, quick, and can lend you a substantial amount depending on the value of your vehicle. 

However, it is important to keep in mind that every loan has to be repaid. No shortcut. If you are applying for a logbook loan, remember that you need to start paying the instalments in full and as soon as they fall due. And it is doable. 

Follow the tips above, and repaying your logbook loan might be just as easy as a walk in the park. 

If you are looking to apply for a logbook loan, we have already made it very easy for you to make comparisons between the logbook loan lenders available in the market today. Visit the Money254 Logbook Loan Comparison page to shop and compare logbook lenders today. 

What’s more, if you apply directly for your logbook loan through Money254, we are currently giving a Ksh2,000 reward for all successful applicants!

Learn More: Money254 Introduces Ksh2,000 Reward for Logbook Loan Applicants

Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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