QandAs: Loans

What is Loan Delinquency?

Answer:
Loan delinquency is one step before defaulting

on a loan. Whether it be a mortgage, a car loan, or a student loan, it is extremely important that the borrower make payments on time. Failure to do so can not only lead to late fees, but also put a stain on the borrower’s credit report.

In cases of loan delinquency, the borrower has missed payments, but has not missed enough to be considered a default. If loan delinquency continues, the borrower will eventually default on the loan. It is highly recommended that anyone worried about making payments contact the borrower before becoming delinquent or defaulting on the loan, since the borrower will be more likely to work with them to adjust the loan.


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