What Are Logbook Loans in Kenya? Everything You Need to Know
If you own a car in Kenya and need quick access to cash, you’ve likely come across the term logbook loan. These types of loans have become increasingly popular over the years because they offer fast financing without requiring you to sell or leave your car behind.
In this post, we’ll break down exactly what logbook loans in Kenya are, how they work, what risks they carry, and what you should consider before applying. We’ll also explain how lenders like Phoenix Capital provide this service and what you need to qualify.
What Is a Logbook Loan?
A logbook loan is a secured loan where your car is used as collateral. Instead of giving up your vehicle, you hand over your logbook (vehicle registration document) to the lender, who registers a temporary claim (called a caveat) on the logbook through the National Transport and Safety Authority (NTSA).
You continue to drive your car as normal while repaying the loan. Once the loan is fully paid off, the lender removes the caveat and returns full ownership to you. This allows car owners to access financial help without losing access to their primary mode of transportation.
How Do Logbook Loans in Kenya Work?
The process of applying for a logbook loan typically looks like this:
Step one is the application. You submit your personal information, vehicle details, and the logbook to the lender. In step two, the lender evaluates your vehicle to determine the loan amount you qualify for. This is usually a percentage of your car’s current market value, often between 50% and 80%.
If approved, you move to the disbursement stage. Funds are usually sent within 24 hours. After this, the lender registers a caveat with NTSA, officially claiming legal interest in the vehicle for the loan period. You begin repayments as agreed. When the loan is fully paid, the lender lifts the caveat, and the logbook is cleared.
Key Features of Logbook Loans in Kenya
These loans are secured by a physical asset—your car—which reduces the risk for lenders and enables them to offer faster access to cash. You do not need to leave your vehicle with the lender. Instead, you continue to use it while repaying the loan. These loans are typically short-term in nature, ranging from 3 to 12 months, with flexible repayment options.
Risks and Considerations
While logbook loans are convenient, they carry risks if not handled carefully. If you default on your repayments, your vehicle can be repossessed by the lender to recover the loan amount. Some lenders may charge high interest rates or include hidden fees in the agreement. It is very important to read all terms and conditions before signing any contract.
Make sure the lender is licensed and registered with the relevant authorities, particularly NTSA. Avoid deals that sound too good to be true or offer extremely high loan amounts for little documentation.
When Is a Logbook Loan a Good Idea?
Logbook loans may be appropriate when you are facing urgent financial needs that require immediate attention. This can include emergencies, school fees, hospital bills, business capital needs, or short-term cash flow issues. However, it is important to ensure that you will be able to make the repayments without disrupting your overall financial stability.
How Phoenix Capital Supports You
Phoenix Capital provides logbook loans in Kenya through a transparent, fast, and secure process. We ensure that all our clients are fully informed and supported from the moment they apply to the time they complete repayment.
We do not charge hidden fees, and our interest rates are clearly outlined in the loan agreement. The process is fully backed by legal documentation and NTSA compliance, giving you peace of mind. Our experienced staff are available to guide you every step of the way.
Helpful Resources
Visit NTSA to understand more about vehicle caveats and legal requirements related to logbook loans. You can also browse our News Page to see how Phoenix Capital supports the community through financial solutions and CSR initiatives.
