Loan Lingo – Delinquency and Default
Channel: The Financial Literacy Course
Date: 2021-01-14

When you don't make the minimum payment on your loan agreement, the lender will mark you as delinquent. This record will stay on your credit report for seven years and can have a devastating effect on how lenders view your credit reputation. If you remain in delinquency for 270 days, you will go into default. Defaulting on your loan can cause terrible consequences, including wage garnishing, lower Social Security payments, and even the IRS can get involved and withhold your tax refunds. What you default on a loan, it will take years of hard work to dig yourself out. If you know you are going to be delinquent, contact your lender and let them know about the problem.