Jordan recently took out a personal loan from Standard Chartered for a home improvement project. One month, he forgets to make his $750 payment. To him, it’s a small oversight. Behind the scenes, the missed payment sets off a chain of automated and manual processes designed to manage risk, update balances, and communicate with the borrower.

Detection of the missed payment

The moment the automatic transfer fails, the bank’s system flags the installment as unpaid. The loan management system updates the outstanding balance, and automated reminders are triggered. Jordan receives an email and an app notification:

“Your February payment of $750 was not processed. Please make a payment within the next 7 days to avoid late fees.”

This detection happens instantly, ensuring the lender has accurate, real-time visibility into outstanding obligations.

Late fees and interest accrual

If the payment isn’t remedied within the grace period, late fees and additional interest are applied automatically. The loan management system recalculates the total due, ensuring that all internal reporting, accounting, and risk tracking systems remain consistent.

Example: Jordan’s $750 payment now includes a $25 late fee and accrued interest, bringing his total due to $775.

Risk and credit reporting

Missed payments trigger updates in borrower risk models. Lenders assess potential default risk and may adjust future lending decisions. In many cases, the missed payment is reported to credit bureaus, affecting the borrower’s credit score.

Example: After 30 days, the missed payment is reported to the credit bureau, slightly lowering Jordan’s credit score and influencing future credit opportunities.

Collections and remediation

If the balance remains unpaid, the lender’s collections workflow activates. Automated reminders, follow-up calls, or structured repayment plans may be offered. Unified servicing platforms coordinate these actions, ensuring borrowers receive consistent communication while maintaining compliance.

Example: At 60 days past due, Jordan receives a call offering a repayment plan. If he accepts, his monthly installments are recalculated, and the ledger updates automatically.

The case for cleaner, connected loan infrastructure

A missed payment should not trigger confusion inside a lending operation. Yet fragmented systems often turn a single overdue installment into an internal investigation because data lands in different places at different times.

Lenders that operate on unified infrastructure, like Stitch, spend less time reconciling events and more time shaping better repayment paths.

When the loan engine and collections logic speak the same language, the entire lifecycle becomes easier to manage, and borrowers get a smoother, more predictable experience when things go off track.