LENDING GLOSSARY
Default
Default
Failure to meet a contractual obligation under a loan agreement.
What does Default mean?
Failure to meet a contractual obligation under a loan agreement. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Default in context
Missing required payments or violating a material covenant may constitute default.
Why it matters in financing
Default can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related lending terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.