How am I Affected if I Miss a Personal Loan Repayment

If you’re like most people, you have a number of monthly expenses that you need to budget for. This can include everything from rent or mortgage payments to car loan installments and credit card bills. But what happens if you accidentally miss a payment on one of your loans? Missing a personal loan repayment can have negative consequences for your financial health. In this credit repair article, we’ll explore how missing a personal loan repayment can affect your credit score.

Understanding the difference between various missed payments is important to know how credit providers and reporting bureaus will classify them. This distinction largely depends on the length of time it takes you to make a repayment after its due date.

Credit providers usually offer a grace period of up to 14 days for customers who miss a payment. If the customer does not make up the missed payment during this time, it may be recorded on their credit report.

The credit reporting bureau, Equifax, considers a repayment that is made between 14 and 60 days after the due date to be late, and more than 60 days after the due date as a default.

Not making a loan payment can cause issues, whether you genuinely couldn’t afford it or you simply forgot. The majority of lenders have a go-to missed payment penalty that they charge to your account when you don’t make a repayment on your loan. This is typically charged for all types of missed payments – even if you rectify the mistake within one or two days.

A penalty for a missed payment is not always a one-off fee. If you don’t make the payment within the specified time frame, you could be charged with more late fees utility’s paid in full.

If you happen to miss a payment, your account balance won’t reduce per the schedule, which racks up additional interest charges on top of the amount already missed. In other words, by missing a payment, you increase the total amount of interest payable for your loan.

If you neglect to pay your missed repayment for more than 14 days after the due date, you risk having the negative event recorded on your credit file. A late payment – paid between 14 and 60 days after the due date – may be recorded on your credit file even if the amount owing is minor.

If you are struggling to make your next personal loan repayment, contact your credit provider as soon as possible. They might be able offer help with finances such as an extension or flexible payment plan.

The sooner you contact your lender, the more likely it is that you can come to an agreement and avoid having a late payment recorded on your credit file. Be aware that this may depend on why your payments are late in the first place, as most lenders have specific standards for what counts as financial hardship.

A good credit score is important for your financial health. This article helped give you a better understanding of how your credit score can be impacted. Understanding this information can help you make the best choices for maintaining a good credit score.

Contact Clear Credit Solutions today. We can help to remove those listings through our credit repair process so that you can obtain the finance you need. Our team of credit repair experts are ready and waiting to help you get your finances back on track. So what are you waiting for? Get in touch with us today and start the credit repair process!