Guides
If You Can't Pay a Loan Back
What happens in week one, month two and beyond — and the three things to do this week.
By REPLACE WITH REAL NAME, REPLACE — e.g. 8 years covering consumer credit · Reviewed by REPLACE WITH REAL NAME · 2 min read · Updated September 24, 2026
Lesson 4 of 9
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What you'll learn
- One missed payment can become $70 in fees within a week once the lender and your bank both charge you — call before the due date.
- Collectors must follow the Fair Debt Collection Practices Act: no calls before 8 a.m. or after 9 p.m., no threats of arrest.
- You will not be arrested for a consumer debt. Show up if you're sued; legal aid is free.
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The first missed payment
Most lenders on this site debit your bank account automatically. If the money isn't there, three things can happen at once: the lender charges a late fee or returned-payment fee, your bank charges an overdraft or NSF fee, and the lender may try the debit again in a few days. That second attempt is how one missed payment becomes $70 in fees before the week is out.
Do this first: call the lender before the due date if you can, or the same day if you can't. Most will move a payment once or split it. Get the change in writing or by email.
Weeks two to eight
The account goes delinquent. Some lenders report late payments to the credit bureaus at 30 days; many high-cost lenders don't report at all, which means the loan isn't helping your credit but a default may still hurt it later through collections. You'll get calls and emails. This is still the best window to negotiate: a hardship plan, a reduced settlement, or a pause.
Collections
After a few months of non-payment the debt is usually sold or handed to a collection agency, and a collection account can appear on your credit report for up to seven years. Collectors are bound by the Fair Debt Collection Practices Act. They must send you a written notice describing the debt and your right to dispute it. They can't call before 8 a.m. or after 9 p.m., can't contact you at work if you tell them not to, can't discuss your debt with your family or employer, and can't threaten arrest, violence or things they don't intend to do. Keep every letter and log every call.
Lawsuits
A lender or collector can sue you for the balance. If they win, the court can order wage garnishment or a bank levy, within limits that vary by state. If you receive court papers, do not ignore them — showing up, or getting legal aid to show up for you, often changes the outcome, especially if the debt can't be documented or the lender wasn't licensed in your state.
What is not going to happen
You will not be arrested. Consumer debt is civil, and a collector who says otherwise is breaking the law. Report it to the Consumer Financial Protection Bureau (consumerfinance.gov/complaint) and your state attorney general.
Three things to do this week
Call the lender and ask, in these words, for a hardship arrangement. Revoke the bank debit authorization in writing to the lender and your bank if the next withdrawal will overdraw you — you'll still owe the money, but you stop the fee cascade. And call a non-profit credit counselor or your local legal aid office; both are free, and both have seen this exact situation many times.
If you need money anyway
Start at the cheapest step you qualify for and work down only if you have to.
Questions people ask
Plain answers to the questions readers ask most often.
Will one late payment ruin my credit?
A single payment under 30 days late is rarely reported. At 30, 60 and 90 days it usually is, and the damage grows. Many high-cost lenders don't report to the bureaus at all until an account goes to collections.
Can they take money from my account without asking?
If you signed an authorization, yes — that's how the payments work. You can revoke it in writing to the lender and your bank. Do it at least three business days before the scheduled debit.
Should I take another loan to make the payment?
Almost never. A second high-cost loan to pay the first is how a small shortfall becomes a cycle. Call the lender and a counselor first.
Related
Keep comparing
Three useful next stops before you choose a lender.
Next lesson · 5 of 9
Credit Union PAL Loans
Continue learning →Sources
Figures were checked against these sources on September 24, 2026.
- FTC — Fair Debt Collection Practices Act (text) ↗ ftc.gov
- CFPB — Regulation E §1005.10(c): stopping a preauthorized transfer ↗ consumerfinance.gov
- CFPB — Submit a complaint ↗ consumerfinance.gov
Last verified September 24, 2026