If you have ever applied for a loan—whether personal, business, student, or mortgage—you may have come across different loan status codes on your application dashboard or credit report. For many borrowers, these codes can be confusing and intimidating.
Yet, understanding loan status codes is one of the most important steps to staying informed about your financial standing. They tell you exactly what is happening with your loan application or repayment process.
This guide explains everything you need to know about loan status codes, their types, and what they really mean in simple, easy-to-understand terms.
What Are Loan Status Codes?
Loan status codes are labels used by banks, lenders, and credit bureaus to describe the current condition of a loan account.
These codes help financial institutions track:
- The progress of a loan application
- Whether a loan has been approved or declined
- The repayment behavior of a borrower
- Any issues associated with an existing loan
Instead of writing long explanations, lenders use short codes to quickly communicate a borrower’s loan position.
Types of Loan Status Codes and Their Meaning
Below are the most common loan status codes and what each of them represents.
1. Application Received
This code simply means that the lender has received your loan request.
At this stage:
- No decision has been made yet
- Your documents are being reviewed
- The lender is assessing your eligibility
It is the first stage of the loan process.
2. Under Review / In Process
When your loan status shows “Under Review,” it means the lender is currently evaluating your application.
This usually involves:
- Credit checks
- Income verification
- Document validation
Nothing is required from you at this point unless the lender contacts you for more information.
3. Approved
This is the status every borrower hopes to see.
An “Approved” code means:
- Your loan request has met all requirements
- The lender has agreed to give you the loan
- Disbursement will happen soon
4. Declined / Rejected
A declined loan status means your application was not successful.
This could happen due to:
- Low credit score
- Insufficient income
- Incorrect or incomplete information
- High existing debt
Seeing this code is not the end of the road. You can always improve your profile and apply again later.
5. Active
An active loan status shows that:
- Your loan has been disbursed
- Repayment is currently ongoing
- The account is functioning normally
As long as you make payments on time, this status remains positive.
6. Current
“Current” means that your loan repayments are up to date.
There are:
- No missed payments
- No overdue balances
- No penalties
This is a healthy loan status and helps boost your credit rating.
7. Past Due
This status appears when you have missed one or more payments.
It signals that:
- Your account is overdue
- You need to make payments urgently
- Late fees may apply
8. Delinquent
A delinquent status is more serious than “past due.”
It means:
- Payments have been missed for an extended period
- The lender considers the account risky
- Collection efforts may begin
This status can seriously damage your financial record.
9. Default
Default status occurs when a borrower completely fails to repay a loan as agreed.
At this stage:
- The lender may take legal action
- Your credit score drops significantly
- Recovery agents may get involved
Defaulting on a loan should be avoided at all costs.
10. Charged Off
A charged-off loan means the lender has given up trying to collect the debt and written it off as a loss. However:
- You still owe the money
- It remains on your credit report
- Debt collectors may still pursue payment
This is one of the worst loan status codes to have.
11. Closed
A closed loan status simply means the loan has ended. This could be because:
- You finished repayment
- The loan term expired
- The loan was settled early
A closed account in good standing is excellent for your credit history.
12. Settled
Settled status means the borrower and lender agreed on a reduced payment to close the loan. Although better than default, it may still reflect negatively on your credit report.
13. Refinanced
This status shows that your loan has been replaced with a new one, usually with better terms.
Refinancing often happens to:
- Lower interest rates
- Extend repayment periods
- Reduce monthly installments
14. Restructured
A restructured loan means the lender has modified the repayment plan to make it easier for the borrower. This often happens when borrowers face financial difficulty.
Why Loan Status Codes Matter
Loan status codes are not just technical terms used by lenders. They directly affect:
- Your credit score
- Future loan approvals
- Interest rates you may qualify for
- Your overall financial reputation
Ignoring or misunderstanding these codes can lead to missed opportunities or financial mistakes.
Conclusion
Loan status codes may look like simple labels, but they carry powerful information about your financial health. Understanding them helps you track your loans, avoid problems, and make smarter money decisions.
Whether you are applying for a new loan or managing an existing one, paying attention to these codes gives you full control over your financial journey.
The more informed you are, the better choices you can make—and that is the real key to stress-free borrowing.
FAQs About Loan Status Codes
1. Can loan status codes affect my ability to get another loan?
Yes, negative loan status codes like delinquent or default can make it difficult to qualify for new loans in the future.
2. How long does a declined loan status remain on record?
A declined application usually stays on your credit report for a short period, but it does not affect your credit score as much as missed payments.
3. Is “closed” loan status a bad sign?
Not at all, a closed loan in good standing is actually a positive indicator of responsible borrowing.
4. Can a loan status be changed after it is reported?
Yes, if there was an error or if you settle overdue payments, lenders can update the status accordingly.
5. What should I do if my loan status shows “past due”?
Make immediate payment and contact your lender to avoid the status turning into delinquent.
6. Does refinancing change my original loan status?
Yes, refinancing usually moves the old loan to “closed” and opens a new active loan account.
7. Are loan status codes the same across all banks?
Most codes are similar, but wording may vary slightly between lenders and credit bureaus.
8. How often are loan status codes updated?
Loan statuses are typically updated monthly or whenever a major change occurs in the account.
