Can PalmPay lock my iPhone because of outstanding loan

Nope. No one can remotely access and disable your iPhone like that.

They can probably send someone to re-possess it if you don't pay however.

Johnathan Burger wrote:

They can probably blacklist it.

Possibly, but I would expect only if they are set as the owners of the service for the device with a carrier.

Don't think they can just cal up a carrier and unilaterally blacklist the device when the service is tied to someone else.

They can probably blacklist it.

And the corresponding app will probably refuse to work too. Which is silly, cause the debt might have been paid thru it.