Failure to repay a loan or meet other financial obligations according to terms.
Default occurs when a borrower fails to make required payments on a loan, credit card, bond, or other debt obligation according to the agreed-upon schedule. Default can happen on mortgages, auto loans, student loans, credit cards, and any form of credit. The consequences are severe: damage to credit score (can drop 100+ points), difficulty borrowing in the future at reasonable rates, legal action by creditors, wage garnishment, and potential home foreclosure or car repossession. Lenders typically begin collection efforts after a single late payment (usually 30 days) and may declare a default after multiple missed payments. If you're struggling to pay, contacting your lender proactively to discuss hardship programs or payment plans is often better than waiting for default.