What to Expect After Missing a Loan Payment
Last Updated: October 2026
Missing a loan payment can happen for many reasons. Your pay may arrive late, an unexpected bill may leave your account short, or you may simply forget the payment date.
If you’ve missed a loan payment in Canada, the consequences depend on your lender, loan agreement, how late the payment is and whether you continue to miss payments.
You may face a fee, the missed payment could affect your credit history, and continued non-payment could eventually result in the debt being sent to collections.
If you’ve already missed a payment, contact your lender as soon as possible. You may be able to make the payment or discuss other repayment arrangements before the situation gets worse.
This guide explains what may happen after a missed loan payment, how your credit could be affected and what you can do next.
What Happens When You Miss a Loan Payment in Canada?
A missed payment doesn’t usually mean every consequence happens immediately.
What happens next depends on the terms of your loan and your lender’s policies.
You may experience some or all of the following:
- The payment becomes overdue
- Your lender contacts you about the missed payment
- You may be charged a late or NSF fee if your agreement allows it
- The late payment may eventually appear on your credit report
- Continued missed payments could result in collections
- With a secured loan, the asset used as collateral may eventually be at risk
If you have a personal loan and want to understand how repayments, interest and loan terms work, read our complete guide to personal loans in Canada.
1. Your Loan Payment Becomes Overdue
Once you don’t make a scheduled payment by the required date, your payment may be considered late under your loan agreement.
Your lender may contact you by email, telephone, text or another agreed method to tell you that payment is overdue.
Check your loan agreement carefully. It should explain when payments are due and what happens if you don’t make them on time.
If you’ve simply forgotten a payment and have enough money available, dealing with it quickly may prevent the problem from becoming more serious.
2. You May Be Charged a Fee
Missing a loan payment can sometimes result in additional charges.
For example, if your lender tries to take a pre-authorized payment and there isn’t enough money in your bank account, the transaction may fail.
Depending on your loan agreement and financial institution, you could potentially face an NSF or other applicable fee.
Some loan agreements may also provide for late-payment charges.
Don’t assume every lender charges the same amount. Check your loan agreement to find out which fees apply to your particular loan.
3. A Missed Payment May Affect Your Credit
Payment history is part of your Canadian credit report.
The Financial Consumer Agency of Canada (FCAC) explains that your credit report may contain information about whether you make payments on time or miss payments.
Missing payments can therefore negatively affect your credit history and credit score.
However, you shouldn’t assume that every payment that’s a few days late will automatically appear on your credit report.
Lenders report account information to credit bureaus according to their own reporting practices. If you’re unsure how your lender handles late payments, ask them directly.
A lower credit score can make it harder to qualify for credit in the future and may affect the interest rates or terms you’re offered.
If your credit has already been affected, our guide explains practical ways to improve your credit score in Canada.
How Long Can a Missed Payment Stay on Your Credit Report?
Negative information doesn’t necessarily disappear as soon as you catch up with your payments.
According to FCAC, information about late or missed payments may remain on your Canadian credit report for a period of time.
The exact period can depend on the type of information, the credit bureau and the province or territory.
FCAC says negative information about accounts such as loans and credit cards may generally stay on a credit report for up to six years.
This is one reason it’s worth dealing with a missed payment as early as possible rather than ignoring it.
You can also check your credit reports with Equifax and TransUnion to make sure the information being reported about your accounts is accurate.
What Happens If You Keep Missing Loan Payments?
One missed payment and repeatedly failing to repay a loan are very different situations.
If payments remain outstanding, the lender may take further steps to recover the money.
The exact process depends on your loan agreement, lender, type of loan and applicable laws.
Your Lender May Contact You
Your lender may contact you about the missed payment or outstanding balance.
Don’t ignore these communications.
If you can’t afford to catch up immediately, explain your situation and ask what options are available.
FCAC recommends contacting your lender if you’re having trouble making payments. Depending on the lender and your circumstances, it may be possible to discuss different repayment arrangements.
Your Debt May Be Sent to Collections
If a debt remains unpaid, it may eventually be sent to collections.
According to FCAC, a creditor may:
- Use its own debt collection department
- Hire a collection agency to recover the money
- Sell the debt to a collection agency
If you’re told that your debt may be sent to collections, contact the creditor immediately.
You may still be able to pay some or all of the outstanding amount or arrange another way to repay it.
Having a debt sent to collections can negatively affect your credit.
Secured Loans Can Put Your Asset at Risk
There is an additional risk if your loan is secured by an asset.
A secured loan uses something you own, such as a vehicle, as collateral.
If you fail to repay the loan, the lender may eventually have rights against that collateral, subject to the loan agreement and applicable provincial or territorial law.
That doesn’t mean your asset is automatically taken away after one missed payment.
However, the potential loss of collateral is one of the main risks you should understand before taking a secured loan.
Legal Action May Be Possible
Long-term unpaid debt can potentially result in legal action.
What a creditor or collection agency can do depends on the circumstances and the laws in your province or territory.
Don’t ignore court documents or other formal notices concerning a debt.
If you’re unsure of your rights, consider getting advice from an appropriate legal professional or your provincial or territorial consumer affairs office.
What Should You Do If You’ve Missed a Loan Payment?
The most useful thing you can do is act quickly.
1. Check whether the payment went through
Confirm that the payment was actually missed. Review your bank account and loan account before making another payment.
2. Read your loan agreement
Check the payment terms, applicable fees and information about late or missed payments.
3. Contact your lender
Tell the lender what’s happened and ask what you need to do to bring the account up to date.
4. Pay the overdue amount if you can afford to
Ask the lender to confirm the amount required, particularly if fees or other charges have been added.
5. Ask about alternatives if you can’t pay
If you can’t afford the full payment, explain your situation rather than simply ignoring the debt.
6. Keep records
Keep copies of emails, letters, payment receipts and details of important conversations.
What If You Know You’re Going to Miss Your Next Payment?
You don’t need to wait until a payment has already failed before contacting your lender.
If you know there won’t be enough money in your account, contact the lender before the due date.
FCAC recommends contacting your lender right away if you think you’ll have trouble making a payment.
Depending on the lender, loan and your circumstances, there may be options available.
The lender isn’t required to approve a change simply because you ask for one, but speaking to them early gives you the opportunity to understand your choices.
Can You Ask Your Lender to Change Your Payments?
Possibly.
FCAC advises borrowers who are having trouble making personal-loan payments to contact their lender. In some circumstances, you may be able to renegotiate certain loan terms.
Any change should be considered carefully.
For example, extending the repayment period may reduce individual payments but could increase the total amount of interest you pay over the life of the loan.
There may also be fees associated with changing a loan.
Before agreeing to new terms, ask for the new payment amount, repayment period and total cost in writing.
Will One Missed Loan Payment Ruin Your Credit?
Not necessarily.
There’s no single number of credit-score points that every Canadian borrower loses after a missed payment.
Credit bureaus and lenders use different formulas to calculate credit scores, and FCAC notes that they don’t disclose the exact formulas they use.
The effect can depend on your overall credit history and what information is reported to the credit bureaus.
What we do know is that payment history matters. FCAC states that missed payments can lower your credit score.
Rather than focusing on how many points you might lose, concentrate on bringing the account up to date and making future payments on time.
Can You Get Another Loan After Missing a Payment?
A previous missed payment doesn’t automatically prevent you from borrowing again.
Lenders may consider several factors when assessing an application, including your credit history, income, existing debts and ability to make the new payments.
However, taking out another loan simply to keep up with existing loan payments can make financial problems worse.
If you’re already struggling with several debts, adding another repayment may not solve the underlying problem.
Before borrowing again, look at your income, essential expenses and existing debt payments to work out whether another loan is genuinely affordable.
Need to compare your borrowing options? If another loan is affordable for your situation, you can compare lenders in our Canadian lender network or check available loan options from FatCat Loans’ lending partners. Approval isn’t guaranteed and lender terms vary.
What Are Your Rights If Your Debt Goes to Collections?
Rules apply to how debts can be collected in Canada.
The rules that apply can depend on whether you’re dealing with a federally regulated financial institution, a collection agency acting on its behalf, or a debt that has been sold to a collection agency.
Federal rules provide protections when a federally regulated financial institution or a party acting on its behalf is collecting a debt. If the debt has been sold to a collection agency, provincial or territorial laws generally apply.
For example, debt collectors are subject to rules about how and when they can contact borrowers and what they can say to other people.
If you’re dealing with collection activity, learn more in our guide to borrower rights in Canada and check the rules that apply in your province or territory.
Frequently Asked Questions
What happens if I miss one loan payment in Canada?
The payment may become overdue and you could face applicable fees. Depending on the lender and how the account is reported, a missed payment may also affect your credit history. Contact your lender as soon as possible to find out what you need to do.
Will one missed loan payment affect my credit score?
It can. FCAC says missed payments can lower your credit score. However, the effect depends on your credit history and the information reported to the credit bureaus.
How long does a missed loan payment stay on my credit report?
FCAC says negative information about credit accounts such as loans and credit cards may generally remain on a Canadian credit report for up to six years. The exact period can depend on the information, credit bureau and province or territory.
Can a lender send my loan to collections?
Yes. If a debt remains unpaid, a creditor may use its own collection department, hire a collection agency or sell the debt to a collection agency.
What should I do if I can’t make my loan payment?
Contact your lender as soon as possible. Explain your situation and ask what repayment options may be available. Don’t simply ignore the payment or communications from your lender.
Can I ask my lender to change my repayment schedule?
You can ask. Depending on your lender and circumstances, it may be possible to renegotiate certain loan terms. Check whether changing the repayment schedule will result in additional fees or a higher total borrowing cost.
Considering your borrowing options? Compare available loan options based on your circumstances and review the rates, fees and repayment terms before accepting an offer.
Final Thoughts
Missing a loan payment in Canada doesn’t mean every negative consequence happens immediately, but it shouldn’t be ignored.
Check your loan agreement and contact your lender as soon as you realize there’s a problem.
If you can afford to bring the account up to date, ask the lender to confirm the amount required. If you can’t, explain your situation and ask whether another repayment arrangement is available.
The longer a debt remains unpaid, the more serious the potential consequences can become. These may include damage to your credit history, collection activity and, in some circumstances, legal action or risks to collateral securing the loan.
Acting early gives you the best opportunity to understand your options before the problem becomes more difficult to manage.
Sources
- Financial Consumer Agency of Canada – Credit Report and Score Basics
- Financial Consumer Agency of Canada – How Long Information Stays on Your Credit Report
- Financial Consumer Agency of Canada – Dealing With a Debt Collector
- Financial Consumer Agency of Canada – Debt Collection: Know Your Rights
- Government of Canada – Office of Consumer Affairs: Debt Collection Agencies
Disclaimer: This article is for general informational purposes only and does not constitute financial or legal advice. Loan terms, credit reporting practices and collection rules vary by lender and province or territory. Check your loan agreement and contact your lender if you’re having difficulty making payments.
