Definition:
A default on a loan occurs when the borrower does not make required payments on in some other way does not comply with the terms of a loan. One example of loan which are occasionally "in default" is a student loan.
If someone defaults on a loan, the consequences may include:
- the loan may become immediately due and payable
- the loan may be turned over to a collection agency
- the borrower's credit rating can be negatively affected.
