How to Decrease Loan Delinquency

Loan delinquency has adverse effects on your personal finances -- lenders can report delinquent loans to consumer credit bureaus, which can negatively impact your credit score and decrease your ability to obtain future loans and credit cards. Lenders typically charge late fees and overlimit fees, which can make it more difficult to bring your accounts current. Becoming delinquent on secured loans, such as car and mortgage loans, may also place you at risk of foreclosure and repossession. Fortunately, you can use several strategies to decrease or eliminate your loan delinquencies.

Instructions

1

Call your lenders as soon as you determine that you will not be able to make your loan payments on time. Your lenders may work with you to set up repayment plans to catch up your delinquent loans while working within your budget.

2

Ask your lender about a temporary payment forbearance. If you experience a temporary reduction in income, your lender may grant a forbearance to help you manage your finances until your income increases, preventing your loan payments from falling farther behind. This can help you catch up your loan payments more easily once your financial situation improves.

3

Reduce personal expenses so you have more money available to apply toward your debts. Simple strategies like taking advantage of a grocery store's discount program, taking road trips instead of extended vacations, and enjoying a rented movie at home instead of taking the family to a movie theater can help eliminate unnecessary expenses from your budget.

4

Start a low-cost side business you can use to make extra money for catching up delinquent loan payments. Freelance writing and web design, lawn mowing, babysitting and errand running can help you earn extra money while working around your full-time job schedule.

5

Apply extra earnings or savings to the largest of most severely delinquent debt first, instead of trying to catch up all of your delinquent debts at once. Once you have brought that account current, apply extra funds to the next largest or most severely delinquent debt.