Delinquency is being late on a loan payment, from the day a payment is missed until the account is brought current. Prolonged delinquency can lead to default.
Delinquency describes an account on which a scheduled payment is past due but has not yet reached default. An account is typically considered delinquent once a payment is missed, and it is often tracked in stages such as 30, 60, and 90 days past due. The longer an account remains delinquent, the more it can affect your credit report and the account itself, and continued delinquency can progress to default. Bringing the account current by paying the overdue amount generally ends the delinquency. Delinquency is the earlier stage that can precede default.
A loan is delinquent as soon as a scheduled payment is not made on time, and it stays delinquent until it is brought current. Lenders and servicers often track delinquency in stages by how long a payment has been past due, and late fees may apply under the agreement.
Bringing an account current, by paying what is past due plus any charges owed, ends the delinquency. If it continues, the agreement may treat the account as in default, which can bring stronger remedies. Speaking with the lender early is the practical way to understand the options before that point.
Delinquency is usually measured in days past due, and lenders act at different points along that count, from reminder notices to late charges to collection activity. Keeping a record of when each payment was made, and how, makes it simpler to resolve any question about whether an account was ever past due.
An example
A borrower's payment is due on a Friday, and the paycheck is delayed until Monday. For those few days the account is delinquent. On Monday the borrower pays the missed amount, plus a late charge the agreement allows after its grace period, and the account is current again.
Common misconceptions
Myth: Delinquency and default are the same.
In fact: Delinquency means a payment is past due. Default is a more serious status defined by the agreement, usually after a longer period of missed payments.
Myth: Once an account is delinquent, it stays that way.
In fact: Paying the past-due amount and any charges owed brings the account current.
Myth: A partial payment ends delinquency.
In fact: An account is usually current only when the full past-due amount has been paid, although a lender may agree to other arrangements.
What to check
- When the agreement considers a payment past due.
- What charges apply to a late payment.
- How to bring the account current.
- At what point the agreement treats delinquency as default.
How this applies at Desert Rock Capital
Desert Rock Capital loans are repaid in fixed biweekly payments that you make as voluntary payments toward your loan account; we never take pre-authorized debits. What applies to a late payment is disclosed in the loan agreement before you sign anything. If a payment date will be hard to meet, call the branch at 801-377-3333 ahead of time.
Based on our loan requirements, loan amounts and application pages. Your actual terms are in the loan agreement.