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Should I Take a Logbook Loan for an Emergency?
Should I Take a Logbook Loan for an Emergency?
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Money Management

Should I Take a Logbook Loan for an Emergency?

Doris Kendi
April 14, 2022

No one is immune to emergencies - that is why it is crucial to have an emergency fund

But the honest truth is, an emergency hits when you least expect it. So even with the highest level of preparation, an emergency can potentially knock you off your pedestal either way. 

And when it does, it might leave you in need of quick cash to fix the situation. It might be a medical emergency, funeral expenses of a loved one, school fees, or even something as simple as some extra cash to help clear your consignment from the port. 

Whatever the scenario, an unplanned emergency expense can be devastating. Therefore, it is not surprising that many Kenyans who do not have sufficient rainy-day savings turn to emergency loans - such as logbook loans - in these situations. 

Logbook loans can provide you with fast financing to help take care of the emergency and then pay back the loan later. 

However, although emergency loans are a lifesaver, they are not free. In many cases, emergency loans are short-term and attract high interest. Hence it is necessary to consider the situation carefully before deciding on an emergency loan.  

What Is an Emergency Loan?

In a simple definition, an emergency loan is a personal loan used to cover large unexpected expenses. While there are many types of emergency loans, these loans are mostly common for people who are in urgent need of cash for an urgent situation. 

These unexpected expenses can include medical bills, funeral costs, emergency repairs (e.g., car repairs), or other unforeseen life-changing events. Sometimes when such emergencies hit, an emergency loan might be the only option available to fend off an even bigger problem.

In addition, you can use an emergency loan - such as a logbook loan - to pay for expenses such as weddings, vacations, and even to make quick investments. 

When it comes to an emergency, you can’t wait several days for your loan to be disbursed. Hence, borrowers look for lenders that offer quick loan disbursement - such as logbook loan lenders. 

Logbook loans are easily accessible, give relatively high amounts (depending on the value of your vehicle), and are disbursed relatively quickly compared to other personal loans. 

Logbook loans are secured emergency loans that use your vehicle as collateral. 

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

When Does It Make Sense to Get a Logbook Loan?

If you don't have sufficient emergency savings to cover an unexpected expense, a logbook loan may be just what you need to bridge the gap. But not every situation is an emergency. 

Kenyans apply for logbook loans for various reasons - some urgent and some not so urgent. However, just because it is an option doesn’t mean that every situation should push you into getting a logbook loan. 

If not handled with the necessary caution, a logbook loan can potentially do more harm than good to your finances. For instance, you should ensure you have a payment plan in place before you sign up for one, as defaulting on the loan can potentially lead to the loss of your car

Also, keep in mind that some logbook loans require you to pay fees upfront. So if you are in an emergency, make sure you can either afford these fees or choose a lender where you don't need to pay upfront.

Also read: 6 Deadly Sins When Taking a Logbook Loan

The Pros and Cons of Logbook Loans During an Emergency

Just like most things in life, logbook loans come in different shapes and colors and have both advantages and disadvantages. 

Here are some of the advantages and disadvantages of logbook loans in an emergency:


  • Easily accessible. There are a variety of lenders to choose from. Visit our logbook comparisons page to see some of the best logbook lenders in Kenya today. 
  • Fast and flexible. Depending on the lender, you can borrow any amount up to 50-80% of your car value and have it processed and sent to you within 24 hours.
  • Reasonably high amount. Unlike digital loans, logbook loans offer a relatively high amount that you can use to cover more significant expenses. 
  • No credit checks. Some logbook lenders overlook credit checks. 
  • Use as you want. Unlike some types of loans, e.g., business loans, you can use the money to cover any expense as you see fit. 


  • Potential loss of your car. You can not bear to default on the loan as you might lose your car.
  • The cost of credit might be high. Logbook loans may charge a higher interest rate or have more fees than other personal loan types - potentially making them relatively more expensive.
  • Additional costs. Some lenders attach a penalty for any inconvenience caused. For example, the lender has the right to charge you a penalty if you miss a payment. Also, some logbook lenders require you to pay fees upfront.
  • The car has to be free of any financing. The said car needs to be free of other types of financing i.e. it should not at the time be listed as collateral for another active loan. 

In summary, here are the pros and cons of using logbook loans in an emergency: 

Logbook Loan Alternatives During an Emergency?

In truth, there are many loan options available that can give you a significant amount as quickly as logbook loans. But here are some alternatives depending on the urgency and level of your emergency:

  • Borrow from friends and family. For many people, this is not a very comfortable option, but it is still an option - especially in an emergency. However, it completely depends on the amount needed and how quickly your family and friends are able to raise the money for you. 
  • Bank. Depending on your relationship with your banker, you might be able to get a secured or unsecured business/personal loan processed pretty quickly. 
  • Sacco. Your Sacco might also be a great option, but it also depends on the urgency. You will typically be limited in the amount you can borrow based on the savings you have with the Sacco. It is possible that the Sacco may require you to be processing your salary through them to qualify. 
  • Merry go round (Also known as ‘Chama.’ Another great option, depending on your ‘chama’ policies and the urgency of your need. 
  • Salary Advance or Payday loans. A great option, but the amount is tied to your salary. So you are not likely to get an amount higher than your monthly salary. 

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

So, Should I Apply For an Emergency Logbook Loan? 

Yes, and no - this entirely depends on the factors outlined above, key among them your ability to repay. 

Emergencies happen all the time. It is a fact of life. And when they do, they might find you pretty unprepared. But do not panic! Every problem has a solution. 

So even if an emergency finds you with no emergency funds, emergency loans such as logbook loans can come in and save the day. If you have a car, all you need is to know where to look for legit logbook lenders, do your research and send in your application. Then help will be on your way soon enough. 

Thankfully, we have already done most of the work for you. Visit our logbook comparisons portal to view and compare some of the most credible logbook lenders in Kenya today.

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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