# Loan Arrears

> What happens if you fall behind on a personal loan, what a default notice means, and how to get free help to agree affordable repayments.

Canonical page: [/debt-money-problems/loan-arrears](/debt-money-problems/loan-arrears/) · Last reviewed: 2026-08-22

Falling behind on a loan is stressful, but acting early gives you the most options. Here is what happens when you miss payments on a personal loan and how to get back on track.

## Key information

- Contact your lender as soon as you think you might miss a payment
- Missed payments can lead to a default and a mark on your credit file
- Most personal loans are non-priority debts, but loans secured on your home are not
- Free debt advisers can negotiate affordable arrangements on your behalf

## What happens when you miss payments

When you miss a loan repayment, the lender will usually contact you and may add a charge. If payments remain unpaid, the lender can issue a default notice — a formal warning, under the Consumer Credit Act, that you must put things right within a set period (at least 14 days) or the account will be defaulted.

A default is [recorded on your credit file](/credit-borrowing/understanding-your-credit-score) and can make borrowing harder for several years. After a default the lender may pass the debt to a debt collection agency or take court action to recover it, so it is far better to reach an arrangement before it gets to that stage.

## Secured versus unsecured loans

Most [personal loans](/credit-borrowing/personal-loans) are unsecured, which makes them non-priority debts — serious, but the lender cannot take your home simply because you have fallen behind. [A loan secured against your home](/debt-money-problems/mortgage-arrears) or another asset is different: it is a priority debt, because the lender could ultimately seek to repossess the asset.

This is why it is important to identify what kind of loan you have. A free debt adviser can help you work out which of your debts are priorities and deal with the most serious ones first.

## Getting back on track

Contact your lender as early as possible and explain your situation. Lenders regulated by the FCA must treat customers in difficulty fairly, and may agree to a reduced payment, a payment holiday, or freezing interest and charges. Putting a request in writing, backed by a budget, helps.

## Your rights

- Before a lender can take certain action under a regulated credit agreement, it must send you a default notice giving you at least 14 days to put things right.
- Lenders regulated by the FCA must treat you fairly in financial difficulty and consider reasonable forbearance.
- You can complain to your lender and escalate free of charge to the Financial Ombudsman Service.

## Official sources

- [National Debtline (free advice)](https://www.nationaldebtline.org)
- [MoneyHelper — money troubles and debt](https://www.moneyhelper.org.uk/en/money-troubles)
- [Financial Ombudsman Service](https://www.financial-ombudsman.org.uk)

## Related

- [Credit Card Debt](/debt-money-problems/credit-card-debt/)
- [Debt Collection](/debt-money-problems/debt-collection/)
- [Problems Repaying Credit](/credit-borrowing/problems-repaying-credit/)
- [Finding Free Debt Advice](/debt-money-problems/finding-free-debt-advice/)

## Sources

- National Debtline — [Debt advice guides](https://nationaldebtline.org/get-information/guides/) (accessed 2026-08-22)
- MoneyHelper — [Dealing with debt](https://www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt) (accessed 2026-08-22)