You may be charged a fee, plus interest. Miss loan payments and your lender could charge you penalty fees, as well as interest on the missed payments. This can also affect your credit score.
Don’t forget, you will need to pay the owed money back – it doesn’t go away. Act now and talk to your lender – it’s in their interest to listen and help you.
Any missed payments will be reported to credit agencies. As soon as you start to miss your loan repayments, your lender will mark this on your credit file.
Collection agencies may get involved. The longer you leave a loan unpaid, the more likely it is that your lender can pass your debt to a collection agency. And if you fail to respond to a collection agency with your lender’s requests, your lender can take you to court.
Your property could be repossessed. If you’ve taken out a loan that’s secured against your home or car, these properties can be legally repossessed (taken away) to cover the debt you owe your lender.
What is bankruptcy? Bankruptcy is a declaration that states an individual is no longer able pay off their debts. To find out more about bankruptcy, visit Citizens Advice.