Late & Missed Payments
What happens if a repayment goes wrong, and how to stop it getting worse.
Missing a payment happens – a wage arrives late, a bill lands at the wrong time. What matters most is what you do next. The sooner you speak to your lender, the more options you are likely to have.
Do This First
If a payment looks like it won't go out, or one already hasn't, contact your lender straight away. Lenders are generally more willing to help when they hear from you early, and they may be able to agree a way forward. If you can't get an answer from your lender, contact us and we'll try to get hold of them for you.
What Usually Happens Next
Every lender has its own process, but if a missed payment isn't dealt with, it typically follows this path.
Straight away
Payment missed
You may be charged a late payment fee, and the lender will try to contact you.
Within weeks
Recorded on your credit file
The missed payment is passed to the credit reference agencies and stays on your file for six years.
After a few missed payments
Formal arrears notice
The lender must send you a notice of sums in arrears, along with information about where to get free help.
Usually after three to six months
Default
The lender may end the agreement and ask for the full balance. A default is a serious mark on your credit file.
If still unpaid
Collection or court
The debt may be passed to a collection agency, and the lender can apply for a county court judgment.
What Will It Cost?
Charges for a missed payment vary from lender to lender, and your loan agreement will set out exactly what yours are. Many lenders charge around £12 per missed payment, a figure based on old regulator guidance that late fees should only cover the lender's costs.
With high-cost short-term credit – loans lasting a year or less where the APR is 100% or higher – the FCA caps default charges at £15 in total, and interest can't be charged at a higher rate than before.
Interest usually keeps building on the amount you owe while it stays unpaid, so the longer a missed payment is left, the more it costs. Our guide to APR explains how interest adds up.
Free Help If You're Struggling
If more than one payment is a problem, free and confidential debt advice can help you work out a plan, and advisers can talk to your lenders for you:
- MoneyHelper – free, impartial money guidance backed by the government
- StepChange – a debt charity offering free advice and plans
- National Debtline – free advice by phone, webchat or online
In England and Wales, a debt adviser can also apply for Breathing Space for you: a legal pause of up to 60 days during which most creditors must stop adding interest and charges and stop chasing you, giving you time to get advice.
Missed Payment Questions
Will one late payment ruin my credit?
It will be recorded, but a single late payment that you quickly bring up to date does far less damage than repeated missed payments or a default. Its effect fades as you build a record of paying on time. Our guide to checking your credit file shows how to see it.
Can I change my payment date?
Many lenders will consider moving your payment date to match when you're paid, especially if you ask before a payment is missed. Contact your lender to ask.
Can I borrow more to cover a missed payment?
Taking on new borrowing to keep up with existing debts is usually a sign it's time for free advice instead. Speak to one of the services above before you apply for anything else.