Can a loan company sue you if you are late a month?

Answer 1

Yes, it can. The better and more important question is whether it makes sense for them to exercise that right.

Lawsuits are expensive and typically, a loan company will not sue for one missed payment because the costs involved with the suit far outweigh the amount that you did not pay. In addition, if this is the first infraction, on an otherwise perfect payment history, the company will be more understanding. The amount not paid will begin to accrue interest as well, leading to a higher long term payment on your behalf. Loan companies typically sue when a person stops paying altogether or pays less than the required minimum, because then the costs of the lawsuit are outweighed by the lost revenues from nonpayment.

Note: This is not to be taken as encouragement to perform any form of bank or loan fraud and should be not be construed as a loan-taking strategy. The proper way to deal with loans is to pay them promptly at billing time.