What to Do If You Miss a Loan Repayment

Last updated: 3 August 2025

Step 1: Don’t Ignore It

As soon as you realise you've missed a loan payment — or are about to — act quickly. Ignoring it will only lead to more interest, fees, and damage to your credit file. If it’s been a few days, you may still have time to make the payment before your lender reports it.

Step 2: Check How Late the Payment Is

Log into your lender’s online portal or app to see how overdue the payment is. Some lenders apply a grace period of a few days before charging a late fee or reporting it to credit reference agencies. The exact timeline varies by lender, so don’t assume all is lost if you’re only a few days behind.

Step 3: Make the Payment as Soon as Possible

If you can afford it, pay the missed instalment immediately. This helps avoid extra interest, prevents further penalties, and reduces the chance of negative credit marks. If you’re paid monthly, consider setting a reminder or using a direct debit in future.

Step 4: Contact the Lender If You’re Struggling

If you can’t make the payment, don’t wait for collection letters. Contact the lender and explain your situation. Many lenders offer support, such as repayment holidays, reduced payment plans, or rescheduling the loan term. Being proactive shows goodwill and can help avoid a default.

Step 5: Understand the Impact on Your Credit Score

Most lenders report missed payments to UK credit agencies after 30 days. This can lower your credit score and make it harder to get credit in the future. A single late payment might not be a major hit, but a default (usually after 3–6 missed payments) is much more serious.

What Happens If You Keep Missing Payments?

Ongoing missed payments can lead to default, which stays on your credit file for 6 years. Lenders may also take legal action or pass the debt to a collection agency. In some cases, they may apply for a County Court Judgment (CCJ), which adds further fees and damages your credit file even more.

How to Prevent It in the Future

  • Set up direct debits so payments are automatic
  • Use calendar reminders a few days before the due date
  • Keep an emergency buffer in your account for loan payments
  • Regularly review your budget and income vs expenses
  • Talk to lenders before problems arise — don’t wait

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Frequently Asked Questions

One missed payment may lower your score slightly, but it’s recoverable if you stay up to date afterwards. Repeated missed payments or a default will have a more serious impact.
Yes, most lenders apply a fixed fee if a payment is late. This will be outlined in your loan agreement.
This can be risky. Only borrow more if you’re confident you can afford both repayments. Otherwise, contact your lender to discuss a temporary solution.