If you have a contract with a loan company and it states that if you are one day late on your payment you are in default can they legally foreclose on your loan?

IF that is what is stated in the contract that you sign, you agreed to those terms.

A contract is binding when two parties of the contract agree to the terms, if you don't agree with the terms stated, crossed them out.

But the law in your state to see if that is valid, sometimes the contract must be in harmony with state law.

Actually most loans have clauses where they are in default at some periold from one to 30 days,

Most companies do not turn them into default at that point, but have the option to do it.

And if it goes into default it means the entire loan becomes payable,
Since I will assume this is not on a house there is really not a foreclosure only a default and the note become payable in full.

I would assume ( and it is only an assume) they use this as a threat to make sure they get paid on time or farily close to on time.

I have been there in my life, not having enough to pay everyone, so who gets put off, the ones who don't call or who don't say as much. The ones who start calling if it is one day late gets paid first.