Minimum payment
The smallest amount you must pay each month to avoid late fees and stay current. Common on credit cards and other revolving credit.
Full definition
The minimum payment is the smallest payment a lender requires each month to keep an account current. On credit cards, minimum payments are typically 1% to 3% of the balance plus interest and fees, which can stretch repayment over decades and produce very high total interest. Personal loans require a fixed monthly payment instead of a minimum, which is one of the reasons borrowers use them to consolidate credit-card debt.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
- Installment loanA loan repaid in fixed monthly payments over a set term. Personal loans, auto loans, and mortgages are all installment loans.
- Revolving creditCredit you can repeatedly draw on up to a limit, with a minimum monthly payment based on the current balance. Credit cards and HELOCs are revolving.
- Prepayment penaltyA fee some lenders charge if you pay off the loan before the scheduled end of the term. Most U.S. personal loans do not have one.
- Late feeA fee charged when you don't make a loan payment by its due date. Typically $15 to $40 depending on the lender and state.
- DelinquencyMissing a scheduled payment by 30 days or more. Reported to credit bureaus and a major negative factor in credit scoring.
- DefaultFailure to repay a loan according to its terms. Usually declared after 90 to 120 days of missed payments, depending on lender and product.
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