Search for Savings & Loans
Logbook Loan Fees and Terms; All You Need to Know
Logbook Loans

Logbook Loan Fees and Terms; All You Need to Know

For many borrowers, the thinking behind loan charges can be a mystery. Why are interest rates different for different lenders? Who sets these rates? Why are some charges different for different borrowers? How does a lender decide what to charge for a specific type of loan?  

These are some questions that may float around a potential borrower’s person's mind when they think about a loan. When it comes to such kinds of unanswered questions, logbook loans are no different. There are a lot of them. 

In our previous articles, we discussed some of the things you should consider before taking a logbook loan, as well as the advantages and disadvantages of logbook loans. 

In this article, we will go in-depth and tell you everything you need to know concerning logbook loan fees and charges. 

Also read: All You Need to Know About Logbook Loans in Kenya

Logbook Loan Associated Fees and Terms

While the logbook loan processing time is often fast, it involves a couple more processes than a regular unsecured personal or business loan. 

Below, we list the fees in a chronological order from what can be described as ‘upfront fees’ - i.e what may be charged before the loan is disbursed - to the interest rates. 

Upfront Fees

The very first step when you contact a logbook loan lender is to determine whether your car qualifies for a loan to be taken against it. Therefore, the car has to be valued to determine its worth which will then determine the maximum amount you are eligible to borrow. 

For logbook loans, they specifically use the Forced Sale Value (FSV) of the car - which unlike regular valuation is a determination of the sale price the car can reasonably go for if it was put on sale for a period too short to allow for proper marketing. 

Think of the FSV as the amount the car would fetch if it was sold at an auction based on a short time of between 60-90 days which would typically attract a smaller pool of buyers. 

Valuation Fee

Valuation is a fee that is charged upfront before the loan is approved. Before proceeding with your application, all logbook lenders require you to take your vehicle to their preselected valuers for it to be valued. 

Valuation fees for logbook loans range from between Ksh2,000 and Ksh5,000. 

There is a fair share of logbook loan lenders who will not charge you a valuation fee and will instead foot the valuation bill themselves. You may want to consider how either option affects the overall cost of your loan. 

The vehicle valuation is a way for the valuer to know the vehicle's Forced Sale Value, which they will then use to calculate the loan amount. Logbook lenders will typically give you a loan equivalent to a percentage of the vehicle’s FSV value typically between 50% and 80%. 

NOTE: The valuation fee is not refundable regardless of whether you end up qualifying for a loan or not. This is for logbook lenders who require applicants to foot the valuation fee. If the lender pays for the valuation fee, then there is no risk of losing money to the borrower at this pre-approval stage. 

Logbook Search + Discharge Fees

Before processing the loan a lender will conduct a search on the vehicle ownership and registration on National Transport Authority (NTSA) TIMS’s portal using the said vehicle’s Registration Number (number plate). This will give the lender the details of;

  • Who is officially registered as the owner of the vehicle
  • Whether the vehicle is co-owned with other lenders such as a bank, a micro-finance institution, etc.
  • The VIN number (or the chassis number)
  • The engine number 
  • Vehicle model, type (station wagon, saloon, lorry) 
  • Other details such as color, engine capacity, etc.)

The logbook search costs Ksh500 and discharge costs Ksh3,000. Depending on the lender, the borrower may have to pay these fees upfront in cash before their loan is disbursed, or have the fees added to the borrowed amount - increasing the principal amount for which interest will accrue. 

Some lenders will deduct the fees before disbursement such that the borrower will not have to pay interest on them, but in effect receive a lower amount than what they had applied for. 

That is why it is important to know the exact amount you want for the need you are borrowing for in order to account for the effects of this and other fees on the final amount if this is the model your lender uses. 

NOTE: these two models also apply for the following upfront fees as well as the processing fee - we are pointing them out early here so you have a good idea of what you should be thinking about as you prepare to apply for a logbook loan. 

Car Tracker 

Among the requirements, logbook lenders require your car to have a functioning car tracker installed at the borrower's expense. This is an upfront requirement, and you will need to have it installed if you do not have it already. 

A car tracking device is a tiny gadget hidden somewhere in a vehicle or an asset that uses a cellular network and global positioning system to track the movement of a car and give its precise location.

Some logbook loan lenders will install a car tracker for free while a majority will charge you a one-off fee ranging from typically between Ksh4,000 and Ksh7,500. Other logbook loan lenders charge a monthly car tracker fee of between Ksh1,400 and Ksh2,000. 

It is important to note that lenders with higher fees may charge lower interest rates which is why one has to consider the TOTAL COST of the loan before making a decision. 

Another smart thing to do when comparing logbook loans on fees is to determine whether a monthly fee or one-off charge gives you the best deal. This will typically be impacted by the loan repayment period. A one-off fee will ideally be cheaper for a longer tenure loan. 

Comprehensive Insurance Cover

If your car only has the basic third-party insurance policy, you will need to take a comprehensive cover at your own cost before you can qualify for a logbook loan.

A comprehensive insurance cover gives the lender assurance that the vehicle is protected against minor and major damages caused by things beyond your control. A comprehensive cover covers everything from collision, fire, vandalism, falling objects, etc. Therefore, the lender is assured that they can recover their loan balance even after something happens to the vehicle. 

Also read: Predatory Lending in Kenya: Don’t Be a Victim

Estimates of how much a comprehensive insurance cover will cost you show it begins at about 3.2% of the vehicle’s value but could go up depending on the age and value of the vehicle as well as the owner’s risk profile. 

A person’s risk profile is judged through a combination of factors such as the driver’s age, number of years of driving claims and claims history. 

NOTE: Logbook loan lenders will typically require you to purchase your own comprehensive insurance without the option of advancing you that amount like they would with all the other fees mentioned above. 


Other costs not common across all logbook loan lenders include legal fees, CRB charges, application fees and bank disbursement fees.

Fees on Disbursement

Interest rate

In Kenya, logbook loan interest rates range from a low of 1.6% a month to a high of 10% on either a flat rate or reducing balance interest structure. The interest rate can vary within this range depending on the lender and their assessment of your risk profile.

It is important to always think about the implication of the other fees apart from the Interest Rate when thinking about the TOTAL COST of the loan especially if you are comparing costs between lenders.  

Depending on the number of fees, the fee structure and whether the lender deducts the costs on disbursement, adds them to the principal or you pay from your pocket a loan with a higher interest rate can be cheaper and vice versa. 

On the Money254 Logbook Loan Comparison portal, we have made it very easy for you to make this comparison between the logbook loan lenders available in the market to help you make the right choice.  

Processing Fee 

Most logbook loan lenders charge a processing fee once you are approved for your loan and will either deduct it from the amount borrowed or added to the disbursed principal amount to be paid back together with the loan - this is as with other fees save for comprehensive insurance costs. 

Typically, logbook loan processing fees are charged at the rate of between 2% and 7%, depending on the lender. The processing/application fee can also be a set amount e.g. Ksh13,000 regardless of the amount that you are borrowing or depending on the value of your car. 

As such, when comparing lenders you may want to ask yourself whether you should go for a fixed processing fee amount or a percentage of the amount you are borrowing. For example, if you are borrowing Ksh200,000, a processing fee of 2.5% will be Ksh5,000 which is lower when compared to a higher fixed processing fee amount. 

On the other hand, if you were borrowing Ksh1 million, you may find the a 2.5% processing fee (Ksh25,000) to be much higher than a fixed Ksh13,000 processing fee. 

How money254 Helps You Compare and Choose a Logbook Loan

We have already done the research for you and pulled together a list of credible logbook loan providers in Kenya, their logbook loan product details, fees, repayment plans, and all the information that helps you get a complete picture of the product you are considering.

Once you enter the loan amount you are looking for and confirm that you have the vehicle logbook in your name, Money254 will return a list of all the logbook loans that you qualify for. 

Please note that lenders will only give you a certain percentage (typically between 50% and 80%) of the valued amount of your car.

On Money254, you can compare each of the logbook loans available to you on interest rates, fees including disbursement and processing fees, interest rate structure (flat or reducing balance), maximum and minimum tenure, as well as any bespoke eligibility requirements.

Visit our logbook loan comparisons page to view, compare and choose a logbook loan that matches your needs. 

Click on the 'Easy Apply Only' option to apply directly for the loan and get contacted by the lender swiftly to process your application.

Logbook Loans Frequently Asked Questions

What is a Logbook loan?

A logbook loan is a type of loan that uses your motor vehicle as security - a car, van, tractor, or motorbike. It allows you to borrow an agreed amount from the lender against the value of your vehicle.

Who is Eligible for a Logbook Loan?

Logbook loans are available to anyone who owns a private, commercial, or passenger service car depending on the specifications of the individual lender.

What do I need to Apply for a Logbook Loan?

You will be needed to provide your logbook and other registration documents to show ownership of the vehicle as part of the loan application and approval procedure. The lender will then do a valuation of your vehicle to determine the amount you are eligible to borrow. The lender will also ensure that the vehicle is clear of any other financial obligations i.e. whether it has been used as collateral for another active loan.

As part of the procedure, some personal information will be required, such as your income. Other logbook lenders insist on a physical address as well as your CRB standing, pay slips and bank statements.  

How Do I Qualify for a Logbook Loan?

Each logbook lender has its own set of qualification requirements for who can acquire a logbook loan. However, in general, you may be eligible for a logbook loan provided you meet the following criteria:

  • You should be over 18 years of age
  • You should be the owner of the vehicle.
  • You should have your name on the logbook
  • There should be no outstanding finance on the car
  • The car should have a comprehensive car insurance
  • The car should be roadworthy and in reasonable condition.

How Much Can I Get From a Logbook Loan?

The exact amounts may vary between lenders. The amount a lender is willing to lend to you is determined by the Forced Sale Value of your car. - that is the sale price the car can reasonably go for if it was put on sale for a period too short to allow for proper marketing. 

Among logbook loan lenders in Kenya, you can qualify for as low as Ksh50,000 to a maximum of Ksh25 million.

However, in general, the more valuable your car, the more money you can borrow. In most cases, you can get from 50% of the value of your vehicle, with some lenders giving up to 80% of the value of your car. 

Also, note that newer cars get a higher percentage compared to older cars.

What’s the Disbursement Duration?

Once the qualification and application processes are completed, the amount you wish to borrow is deposited into your account and just like the amount, the disbursement duration also varies across different lenders.

Some lenders promise to disburse the money as quickly as 6 hours, some 24 hours and others go up to a couple of days depending on their terms and conditions.

What are the Interest Rates for Logbook Loans?

The interest rates for logbook loans range from 1.6% to 10% per month.

What Other Associated Costs Will I Pay For?

Other common costs associated with logbook loans include: processing fees, Valuation, NTSA logbook discharge, car tracker and comprehensive insurance cover if you do not have one. 

Other costs not common across all lenders are legal fees, CRB charges, application fees and bank disbursement fees.

What’s the Repayment Period and Repayment Plan for Logbook Loans?

Repayment durations for logbook loans range from one month to 60 months while the repayment plan is mostly monthly but the frequency is agreed upon by the borrower and the lender.

Can I Still Use my Car with a Logbook Loan?

Yes, you can use your car normally. You are completely responsible for the vehicle's insurance and maintenance. The only difference is that the loan is secured against the vehicle, and you will not be allowed to sell it until the debt is paid off.

What Will Happen if I Fail to Pay my Logbook Loan?

If you are experiencing financial difficulties and are unable to make your monthly payments on time, you can reach out to your loan provider and work out an extension plan.

If you default and you fail to make any kind of commitment or late repayment plan with your logbook loan provider, you will receive a demand letter and be given some more time (14 days in most cases) to make your repayments, but if you completely fail to react, the logbook loan provider will start the process of repossessing your car.

No items found.

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.

Get the Money254 App and don't miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.

Get it on Google Play
A person holds the Money254 App in their hand.

Welcome to Money254 - your simple way to compare loans in Kenya online.

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Download the new Money254 App and don’t miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Get it on Google Play

Learn more about Personal Loans available in Kenya on Money254

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Instantly search loan products from established providers in Kenya and compare on the terms that matter most to you.
Find the best Personal Loans for me

Don't miss another article - download the new Money254 App Today

Get it on Google Play
Download the Money254 app on Google Playstore

Sign up for our newsletter and get weekly money tips to your inbox.

Get updates from the Money254 team on financial news and new Money254 features.