What is a delinquent loan?

A delinquent loan is a loan for which the borrower has failed to make scheduled payments on time. Typically, a loan is considered delinquent after the first missed payment, and the status can worsen over time if payments remain unpaid. Lenders may impose late fees and take further actions, such as reporting to credit bureaus, which can negatively impact the borrower's credit score. If the delinquency continues, it may lead to default, where the lender may initiate collection processes or foreclosure.