What Happens If You Miss a Loan Payment in the UK?
Understand the consequences of missing a loan payment in the UK, from credit score damage to legal action, and what to do if you're struggling.
What Happens If You Miss a Loan Payment in the UK?
Missing a loan payment can have consequences that extend far beyond a single late fee. Understanding what happens — and acting quickly — can limit the damage.
Immediate Consequences
- Late payment fee: Most lenders charge a fee, typically £12–£25.
- Interest continues to accrue: The outstanding balance doesn't pause.
- Lender contact: Expect a call, letter, or email from your lender within days.
Impact on Your Credit Score
A missed payment is reported to credit reference agencies once you're 30 days overdue. A single missed payment can lower your credit score significantly and remains on your file for six years. Multiple missed payments or defaults have increasingly severe effects.
Escalation Path
If payments continue to be missed:
- The account may be marked as "defaulted" after 3–6 months
- The debt may be sold to a collections agency
- The lender may take legal action, resulting in a County Court Judgement (CCJ)
- For secured loans, repossession becomes a possibility
What to Do If You're Struggling
Contact your lender before you miss a payment, not after. Most UK lenders are required to treat customers in financial difficulty fairly — this may include a repayment holiday, reduced payments, or a temporary freeze on interest. Free debt advice is available from StepChange (0800 138 1111) and Citizens Advice.
