What Happens If You Miss a Loan Repayment?

If you miss a loan repayment, your lender will usually contact you and may charge a late fee under your contract. If the payment is more than 14 days overdue, it can be recorded on your credit report for two years. A default can only be listed after at least 60 days and two written notices. The most important thing is to contact your lender early, because there are options if you're struggling.

Here's what happens step by step and how to get back on track.

What happens, step by step

1. The payment fails or isn't made. Your lender will usually contact you by SMS, email or phone.
2. Fees may apply. Many loan contracts include a dishonour or late payment fee. Check your contract for the amount.
3. After 14 days: the missed payment can be recorded in your repayment history on your credit report. It stays there for two years.
4. After 60 days or more: if at least $150 is overdue, the lender must send you a written notice asking you to pay.
5. At least 30 days later: the lender sends a second notice, warning that a default may be reported.
6. At least 14 days after the second notice: the lender can list a default on your credit report. It stays for five years, even after it's paid.

Source: OAIC, repayment history and defaults.

You have the right to ask for hardship help

If illness, job loss, a relationship breakdown or another change makes it hard to keep up, you can ask your lender for a financial hardship arrangement. This might mean:

• Lower repayments for a while
• A short pause in repayments
• A longer loan term so each payment is smaller

A lender can't list a default while it's considering your hardship request, or until 14 days after it tells you the request has been refused. A hardship arrangement is noted on your repayment history for one year instead of showing as missed payments.

What to do if you've missed a repayment

1. Call your lender straight away. The earlier you talk to them, the more options you have.
2. Pay what you can, even part of the amount, if that's possible.
3. Ask about a payment plan or hardship arrangement if you can't catch up quickly.
4. Check your budget. Our guide to the best budgeting apps can help you see where your money goes.
5. Get free advice. Call the National Debt Helpline on 1800 007 007 to speak to a free, independent financial counsellor.

If you're a Jingle customer

Talk to us as early as possible on 1300 654 230 or at support@jingle.com.au. We can talk through options like reducing or pausing repayments, or extending your term. Read our financial hardship policy for how it works.

If you disagree with a listing

If you think a missed payment or default has been listed incorrectly, contact the lender first. If it isn't fixed, you can complain for free to the Australian Financial Complaints Authority (AFCA) or the OAIC.

How to avoid missing repayments

• Line up your repayment date with your payday
• Set up a direct debit from the account your pay goes into
• Keep a small buffer in that account
• Set a reminder a few days before each repayment
• Tell your lender early if something changes

Frequently asked questions

What happens if I miss one loan repayment?

Your lender will usually contact you and may charge a fee. If it's more than 14 days late, it can show on your credit report for two years.

How long before a missed payment affects my credit score?

A payment can be reported as missed once it's more than 14 days overdue.

When can a lender list a default?

Only when at least $150 has been overdue for 60 days or more, and after the lender has sent two written notices, the second at least 30 days after the first.

Can I stop a default being listed?

Paying the overdue amount, or asking for a hardship arrangement before the default is listed, can prevent it. A lender can't list a default while your hardship request is being considered.

How long does a default stay on my credit report?

Five years. If you pay it, the listing is updated to show it's been paid.

Sources

• OAIC: Repayment history and defaults