Default

Default is the failure to meet the terms of a loan agreement, usually by missing payments. It can trigger collection actions or legal remedies.

Default may lead to repossession, foreclosure, or wage garnishment depending on the loan type and collateral. It has a severe impact on credit scores.

Related Terms

Delinquency

Delinquency occurs when a borrower fails to make a payment by the due date. It is typically reported...

Collateral

Collateral is an asset that a borrower pledges to a lender as security for a loan. If the borrower d...

Charge-off

A charge-off is when a lender writes off a loan as uncollectible for accounting purposes. It typical...

Credit Score

A credit score is a numerical rating that represents a person's creditworthiness based on their cred...

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