What happens if you miss a loan payment?

Study for the GradReady Real-World Finance Exam. Utilize flashcards, multiple-choice questions, and detailed explanations to grasp essential financial concepts. Prepare for success!

Missing a loan payment typically results in incurring late fees and can negatively impact your credit score. When a payment is missed, most lenders will assess a late fee as specified in the loan agreement. Additionally, payment history is a significant factor in determining credit scores, so late payments can lead to a decrease in creditworthiness, potentially affecting future borrowing opportunities and interest rates.

In contrast, the other options are not standard consequences of missing a payment. Loan forgiveness does not automatically happen upon missed payments; rather, loans must be repaid according to the terms agreed upon. While some loans may offer grace periods, this is not a universal practice, and it usually doesn't extend for an entire month without prior arrangements. Lastly, loans are not typically transferred to another lender simply due to missed payments; that process is more complex and often involves default scenarios or refinancing arrangements.

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