Finding out you have an overdue repayment may seem stressful, but the good news is if you get it in time, you may be able to avoid additional fees. It's easy to get an overdue repayment sorted — as easy as calling or emailing your provider to sort out a new payment schedule. The only potential issue is timing.
Your credit file.
When you first miss a repayment window, your credit file reports it, usually by the next time your file has updated. If your credit file hasn't been updated yet, you could talk to your provider about leaving your recent missed repayment out because you're currently making the repayment.
What is the status of my overdue repayment?
Between the 1st and the 29th day, your overdue repayment will be recorded as missing. By day 30, your missed payment is registered as a default, which means additional late fees are added, your credit score drops and a debt collection agency may be contacted to collect on your over amount.
Debt collectors aren't as bad as they might seem. Their role is to stand in for your credit provider or lender, chasing you up to make sure you repay what you owe. Legally, debt collectors can only continue to fine you for late repayment — missing a payment date isn't a jailable offence.
Do I have to pay my bills?
If you like getting access to credit cards, loans, low-interest rates, and other credit amounts, continue to repay your debt.
If your default has already gone to a debt collection agency, you'll likely have to continue making repayments through them. If you believe you've been mistreated, you can always query the amount you owe. However, debt collectors will usually add on additional interest, transfer fees (on the unpaid amount) and possibly other late fees.
Can I shift my debts back to my provider?
This will depend on your provider. Once your overdue payment has been shifted to a debt collector, they may want to keep it with a third party. Collectors will then settle it themselves and inform your provider that your debt has been shifted back.
Since fees have already been added, there isn't much of an advantage in shifting back your debt unless you prefer to deal with your provider (or you feel the debt collection agency's fees are unreasonable). But to repeat — this is all up to your provider whether they want to shift back the debt or not.
What else do I need to know?
You don't need to provide your contact or payment details over the phone with debt collectors, even if they ask you. You also don't have to make the payment right away. Instead, get them to send you a list of your payment obligations, and explain their reasoning for any additional fees or outstanding amounts. You can set up a payment schedule with their account if you agree, based on a new payment agreement.
No more additional fees should be added when you reach this point because you've started to negotiate repayments.
A missed payment is still with my provider at the moment.
In that case, you should have the method of payment sorted — it will be the same method you initially set up to repay your credit. The next step is to ring or email your credit provider to sort out a new payment arrangement or begin your old one again.
Credit files usually update every month, so if you're under that time, you might avoid your missed payment getting recorded on your credit history. You can also talk about getting late fees waived for 'good intent' — but this is really up to the provider.
It's in their best interests to get you repaying, though. Getting in contact also means avoiding those additional overdue fees, which will be included in your loan agreement.
Can I pause my repayments?
Yes, but this won't prevent additional interest from being added on because your loan will continue for longer. Your minimum repayments may increase at the end of the agreed pause period too. So it would be best if you thought before you pause your repayments — it may be easier to work out a new repayment plan.
Can I extend my loan?
You can, but that may also increase your overall interest, even if it decreases what you immediately owe. It all depends on what you can afford, though — no point signing up to an agreement you can't meet and heading into heaps of debt.
So, where do I go from here?
You could read some of our blogs on budgeting, debt consolidation or credit enquiries for further information on reducing your loan amount and freeing up your account. If you're struggling to meet repayments, then the first thing to do is stop applying for more credit and review your actions.
Talking to providers about overdue payments is as simple as getting in contact with them and sorting out a new arrangement. If it's within 29 days, it will be with your original provider, but over that, you may have to deal with a debt collector. Remember that you do have the right to review all information about your debt and request a reasonable payment strategy to help you deal with the original debt.