Missing a repayment can have consequences, but ignoring it usually makes the situation harder. Check what happened, contact the lender and only agree to a payment you can realistically afford.
Missed a payment? Do these three things now
- CheckConfirm the payment amount, due date and whether the payment actually left your bank account.
- ContactTell the lender what happened. Contacting them early gives them a better chance to understand your situation.
- ProtectWork out what you can afford after essential living costs and priority commitments. Do not promise a payment that will leave you short.
What happens after you miss a loan repayment?
Missing a repayment means the lender did not receive the amount required by your credit agreement on time. This could happen because there was not enough money in your account, a Direct Debit failed, you forgot the date or your income arrived later than expected.
The first step is to check exactly what happened. Look at your bank account and loan statement. Make a note of the amount, the due date and any message from the lender.
If the payment should have gone through but did not, contact both your lender and bank. Keep screenshots, reference numbers and copies of any messages. This evidence may help if the problem was caused by an administrative or banking error.
Do not assume that making the payment a few days later will remove every consequence. Ask the lender whether the account is now up to date, whether any interest or charges have been added and whether anything will be reported to the credit reference agencies.
The lender may contact you
The lender may contact you by text, email, telephone or letter. A message does not necessarily mean that serious action has already started. It may simply be asking you to bring the account up to date or get in touch.
Read every message carefully. Check that it is genuinely from the lender before sharing personal or payment information.
Ignoring contact will not make the debt disappear. If you cannot pay the full amount, say so. A clear explanation is more useful than making a promise you cannot keep.
Your account may go into arrears
Arrears are the payments that should already have been made but remain unpaid.
For example, if your monthly repayment is £90 and you miss it, the account may be £90 in arrears before any interest or permitted charges are considered. If another payment is missed, the overdue balance could increase.
The amount owed and the way interest is calculated will depend on the credit agreement. Check the agreement or ask the lender for an up to date balance.
Interest or charges may be added
A lender may continue charging interest or apply a missed payment charge if the agreement allows it. This is not the same for every loan.
Ask the lender for a clear breakdown showing:
- The payment that was missed.
- Any interest added.
- Any charges applied.
- The total amount currently overdue.
- The normal balance still outstanding.
If the lender offers a temporary arrangement, ask whether interest will continue and whether the arrangement will increase the total amount you repay.
Could it affect your credit file?
A late or missed payment may be reported to one or more credit reference agencies. If it appears on your credit file, future lenders may consider it when deciding whether to lend and what rate to offer.
There is no reliable number of points that every missed payment removes from a credit score. Credit reference agencies calculate scores differently, and lenders use their own assessment methods.
The effect can depend on the rest of your credit history, how recently the payment was missed and whether the account returned to normal.
Paying the overdue amount does not necessarily erase an accurate payment record. It should, however, allow the account to show that the arrears have been cleared.
A missed payment is not the same as a default
There is no single default timetable that applies to every situation. It can depend on the agreement, the type of credit and what happens after the first missed payment.
If arrears continue, the lender may send formal notices, restrict the account, use a debt collection company or take further recovery action. The lender must follow the relevant rules and legal process. A default is one of the entries that can count as bad credit when you next apply.
Contact the lender as soon as you can
You do not have to wait until a payment has been missed. If you already know you will struggle, contact the lender before the due date.
Prepare a simple picture of your finances first. Write down your income, essential living costs, priority bills and other credit commitments. This helps you explain what you can genuinely afford. MoneyHelper has guidance on talking to your creditor.
What you can say to the lender
“Hello. My repayment of £[amount] due on [date] has been missed, or I expect to miss it, because [short explanation]. After paying my essential costs, I can currently afford £[amount] on [date]. Please explain what support may be available, whether interest or charges will continue and how any arrangement could be shown on my credit file.”
Do not include account numbers, bank details or other sensitive information in an unsecured email or online form.
What support might a lender offer?
The support available will depend on the lender, the agreement and your circumstances. Possible options could include:
- Moving the payment date.
- Giving you more time to pay.
- Accepting reduced payments for a limited period.
- Agreeing an affordable repayment plan.
- Reducing or pausing certain interest or charges.
- Referring you to free debt advice.
These are examples, not promises. A lender does not have to provide every option.
Before accepting an arrangement, ask:
- How much will I pay each month?
- When will the arrangement end?
- Will interest or charges continue?
- Will the total cost increase?
- How will this be reported to credit reference agencies?
- What happens if my circumstances do not improve?
Keep written confirmation of anything agreed.
Pay essential and priority commitments first
When money is limited, some missed payments can have more immediate and serious consequences than others.
Rent, mortgage payments, council tax, gas, electricity, court fines and child maintenance can be priority commitments depending on your circumstances. An unsecured personal loan will usually be treated differently, but this does not mean it should be ignored.
Do not agree to a loan repayment that leaves you without enough money for food, housing, heating or other essentials. If you are unsure what to pay first, use MoneyHelper’s guide to prioritising your debts or speak to a free debt adviser.
Avoid turning one missed payment into a larger problem
Do not rush into another expensive loan simply to cover the missed repayment. The new loan creates another payment and could make the overall situation harder to manage.
Also avoid:
- Promising more than you can afford.
- Ignoring letters or formal notices.
- Giving payment details to an unverified caller.
- Cancelling a payment instruction and assuming this cancels the debt.
- Making several credit applications without checking affordability.
- Paying a company for debt help before checking whether free help is available.
If the problem is likely to continue, free debt advice may be more useful than another credit application.
Find your next step
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What if the lender has made a mistake?
If you believe a missed payment has been reported incorrectly, contact the lender first. Explain the error clearly and provide evidence such as bank statements, payment confirmations or messages.
You can also raise a dispute with the credit reference agency displaying the entry.
An accurate missed payment should not normally be removed simply because it is inconvenient. However, genuinely incorrect information should be investigated and corrected.
If you are unhappy with the lender’s response, make a formal complaint. The lender should explain its decision in a final response. If the complaint remains unresolved, you may be able to take it to the Financial Ombudsman Service.
When should you get free debt advice?
Consider getting free debt advice if:
- You have missed several payments.
- You are borrowing to cover existing debt.
- You cannot afford priority commitments.
- You are receiving formal collection or court documents.
- Your income has fallen and is unlikely to recover soon.
- You feel unable to deal with creditors alone.
The MoneyHelper Debt Advice Locator is free and confidential. MoneyHelper also explains what help is available if you are struggling with debt.
Frequently asked questions
Not necessarily, but it may affect your credit file if the lender reports it. The impact varies because credit reference agencies and lenders use different systems. Contact the lender and bring the account up to date if you can.
You may be able to, but contact the lender first. Ask for the exact amount required because interest or a permitted charge may have been added. Also ask whether the payment has already been reported as late.
You can contact the lender as soon as you expect difficulty. The support available will depend on your circumstances and the lender’s assessment. Contacting the lender does not guarantee a particular outcome, but early communication can make the situation easier to understand.
No. Cancelling the payment instruction does not cancel the credit agreement or remove the amount owed. Contact the lender if you need to change how or when you pay.
Be very careful. Another loan adds a new debt and another repayment. If you are already struggling, borrowing more could make the situation worse. Review your budget and consider free debt advice first.
It may. Ask the lender how the arrangement will be reported before accepting it. You should also ask whether interest will continue and whether the arrangement increases the total cost.
Contact the lender and bank immediately. Keep evidence showing that sufficient money was available or that the payment was attempted. Ask the lender to investigate before making a final reporting decision.
MoneyHelper can direct you to free and confidential debt advice. A trained adviser can review your full circumstances and explain the options that may be available.
The important point
A missed payment should not be ignored, but it does not automatically mean your loan has defaulted. Check what happened, speak to the lender and protect essential costs. If the difficulty affects more than one bill or is likely to continue, seek free debt advice.
LoansForBadCreditUK.co.uk is a credit broker, not a lender. We do not provide personal debt advice. This guide contains general information and does not replace support from your lender or a qualified debt adviser.