I Missed a Loan Payment. What Happens Now?

Summary
Missing a loan payment can happen to anyone. If you’ve missed a loan payment learn more from OneMain on what to do next.
In this article:
A family emergency, a loss of income, an unexpected medical bill or unplanned car repair. No matter the reason, you missed a due date. While it’s not the end of the world, failure to pay back a loan can set off a chain of events that you’d be wise to get in front of. Let’s take a look at what you can do, what can happen and ways to prevent missing another loan payment.
What happens if I miss a loan repayment?
Depending on your written agreement and what’s allowed by law, a missed loan payment could automatically trigger a late fee from your lender. After 30 days, the missed payment could show up on your credit report and affect your credit score.1 When you don’t pay your loan for a longer period of time, such as 60 days, 90 days and beyond, the remarks on your credit report can get progressively worse. More serious consequences could include collateral being repossessed, the debt being charged off or the lender suing to enforce the debt.
Depending on your lender, you may be able to avoid more serious consequences if you make the payment within 30 days or communicate with your lender to find a solution. Being prepared for what happens after a missed loan payment can make things a little easier. So let’s dive deeper.
Late fees. The fee amount can vary by lender and state and may be influenced by the type of loan, your remaining balance and how long the payment stays outstanding. Some lenders might offer a grace period, so refer to your signed agreement for details.
Reduced credit score. Lenders are allowed to report a missed payment to credit bureaus after at least 30 days. That could cause your credit score to go down. It may continue to go down if the balance remains unpaid. However, lenders may choose to wait longer to report or simply not report at all. Learn more about how late payments affect your credit score.
Extra interest. For loans with daily simple interest, your repayment schedule assumes that payments will be made by your due date every month. If you miss a loan payment, you should expect to see a larger portion of your next payment put toward interest.
As we’ve mentioned, your lender may offer a 30-day grace period during which they won’t report the late payment. However, added interest will continue to accrue during that period on the balance you owe, including any fees tacked on for the late payment. If you become very past due, it may take a number of payments to pay off the extra interest or even cause a failure to pay back your loan on time, even if you get back on track.
What should I do if I missed a payment?
Call your lender and explain why you missed the due date. By taking responsibility and presenting your case, they may have payment options available that can help get your account back on track. You might avoid additional late fees and interest charges if you communicate closely with your lender and pay it off sooner rather than later.
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How do I fix missing a loan payment?
After you’ve addressed the missed payment, find a way to prevent it from happening again. There are a couple simple strategies to help you avoid delinquency and what happens if you miss a loan payment.
Sign up for notifications. Some lenders will email or text you when your payment is due so you don’t forget. Or you may want to set your own calendar notification. However you typically keep track of your schedule, try to incorporate payment notifications into your system.
Automatic payments. If you want a foolproof way of paying on time, consider signing up for automatic payments. This payment method allows you to have funds automatically withdrawn from your checking or savings account. Some lenders might offer biweekly automatic payments or other frequencies, a choice of your payment date, the ability to make extra recurring payments to pay down faster and recurring debit card payments.
Re-evaluate your budget. If your income or expenses have changed recently, it may be time to review your monthly budget. If you’ve never created a budget before, the process will give you important insight into where you can cut back in order to meet all your monthly payments. Making a new budget may not sound fun, but you’ll never regret it.
Be proactive, not reactive
There’s no need to worry about what happens if you miss a loan payment when you have the tools to stop it before it starts. Explore our financial calculators and financial guidebooks to get a clearer picture of your finances and the money options available to you. Because when you stay in the know, you can stay in control.
1. "How Late Can You Make Your Payments Before They Negatively ...." 29 May. 2021, https://www.ncconsumer.org/news-articles-eg/how-late-can-you-make-a-payment-before-it-goes-on-your-credit-report.html. Accessed 23 Jun. 2022.
This article has been updated from a previous posting on March 12, 2018. Matt Diehl contributed.
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.