How to get back on track after missing a loan payment

It happens all too often: You think you're on top of everything when you suddenly realize you forgot to make your loan payment last week.

Before you panic, take a minute. A late payment isn't ideal, but it's not the end of the world. You can fix your mistake and get back on track.

Not sure how to start? Here's what to do when you pay late—and how to get back on track.

Step 1: Take stock of your situation

The very first thing to do is to consider the severity of your situation. Are you a day or two late, or have you missed an entire month? How far behind you are on your personal loan payment will determine the best way to fix the situation.

If you're only a few days late on your loan, you may be able to pay your bill and that's it. Some lenders have a grace period for payments that gives you a few extra days without penalty. Even if you're charged a late fee, you may be able to get it waived if you've never missed a payment before.

If you're 30 days or more past your due date, contact your lender right away. Let them know that you had a snafu but you're going to make things right. If you have a good payment history up until now, your lender will likely be understanding and work with you to help you catch back up.

What happens if I miss multiple payments?

Things become more complicated when you're multiple payments behind. You should contact your lender as soon as possible to explain the situation. If you're facing financial hardship, like a lost job or severe illness, your lender may be willing to work out a payment plan that helps you get back on track.

Step 2: Make the late payment as soon as possible

The sooner you can pay your past-due amount, the better. If the money is in the bank, pay it right when you realize your mistake. You'll be on a stronger footing going forward if your account is totally caught up.

If you don't have the money to make your late payments, contact your lender immediately. The lender may be willing to accept a partial payment or defer your payment to the end of your loan. Whatever the case, you'll have the best chances of a positive outcome the sooner you get in touch with your lender.

Step 3: Protect your credit

Late fees aren't the only potential consequence of paying your loan late. A late payment that's reported to the credit bureaus could do a lot of damage to your credit scores, too.

The good news is that being a few days late on your loan payment won't kill your credit score. In fact, it won't even be reported to the credit bureaus at all. That's because lenders need to wait until an account is more than 30 days past due before it can be reported to the credit bureaus.

Even if you're more than 30 days late with your payment, you could still avoid credit damage if you contact your lender right away. A payment plan from your lender could include an agreement not to report the late payment to the credit bureau, thus preserving your credit scores.

Step 4: Adjust your system

A late payment means something slipped through a gap in your system, so it's smart to adjust things to close that gap. Consider a few ways to stay on top of payments:

• Use autopay. If you always have the money in the bank but sometimes forget a due date, automatic payments could save the day. 

• Set up phone reminders. Your smartphone likely lets you set recurring calendar reminders. Make a reminder that notifies you a few days before your due date (and maybe each day after that, if you're prone to procrastination).

• Change your due date. Ask your lender if you can change the date your bill is due each month. Moving it closer to your payday could make it easier to manage.

• Download a personal finance app. You have a lot of choices for mobile apps that will send you reminders and notifications for bills, as well as offering other useful tools.

Step 5: Focus on progress, not perfection

Once you're back on track, move on. Don't focus on your past mistakes or let the guilt or worry stress you out. If you've adjusted your system to make a future late payment less likely, that's the best you can do. 

No one has perfect finances, and it's not fair to yourself to expect it of your own. We all make mistakes; learn from them and apply those lessons as you move forward.

What’s next: Build momentum again

A late loan payment doesn't have to be a huge disaster. Pay your overdue bill, keep an eye on your credit, and set up autopay or phone reminders to keep it from happening again. Learn from your mistakes and apply those lessons to building a better financial future.