default
The failure to fulfill a legal obligation, especially the failure to repay a loan according to the agreed terms.
A severe state of non-payment that occurs after prolonged delinquency, typically resulting in the loan being accelerated (due in full immediately) or sent to collections.
Word relationships
- non-payment: Non-payment is the act of not paying, while default is the formal legal status triggered by that non-payment.
- repayment: Repayment is the successful fulfillment of a debt obligation.
Commonly confused with
- delinquency: Delinquency is being late on a payment, whereas default is the formal breach of contract when payments stop entirely.
Word family
- defaulter (noun): A person who fails to pay a debt or attend court.
Collocations
- default on a loan
- default rate
- in default
Example sentences
- "If you default on your loan, the lender can seize the collateral." Loan contract warning
Memory hook
Think of 'fault'. It is your 'fault' if you fail to pay, leading to a financial 'default'. Failing to pay is your fault.
When not to use
In technology, 'default' refers to a pre-selected option. Do not confuse the financial failure with the tech setting.
Fun facts
- Sovereign default occurs when an entire country fails to pay back its national debt. Argentina has defaulted on its debt multiple times in history.
Related words
Explore more words
Breach, deficit, defect, liability, dereliction, Foreclosure
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