Definition
Arrears
Arrears refers to a debt or payment obligation that is overdue. If you miss a payment on a loan, credit card or bill, the amount you owe becomes arrears. Being in arrears can affect your credit file.
Example
After missing two monthly loan repayments, the borrower was in arrears of £320.
Common misunderstandings
- Arrears applies to any overdue payment — not just mortgage payments.