ECONOMICS

Detailed explanation-1: -Defaulting on a loan happens when you miss payments for a specified period of time. When a loan defaults, it’s sent to a debt collection agency whose job is to collect the unpaid funds from you.

Detailed explanation-2: -The lender will set up a reasonable plan for you to pay back the loan. The lender will seize and liquidate your business or personal assets to cover the loss. The lender will cut its losses and settle with you for a defined amount.

Detailed explanation-3: -Generally, default refers to a company or individual who fails to make payments or interest payments on time. It typically applies to loans taken from a bank or provider and can lead to a declaration of bankruptcy or loss of assets (collateral) that will be used to pay off debts.

Detailed explanation-4: -When a company defaults on this kind of debt, the lender can take possession of the property or equipment offered as security for the debt. In some cases, the lender is limited to the secured assets, and if the obligation is greater than the secured value, the lender must take the loss.

Detailed explanation-5: -If you miss payments or you don’t pay the right amount, your creditor may send you a default notice, also known as a notice of default. If the default is applied it’ll be recorded in your credit file and can affect your credit rating. An account defaults when you break the terms of the credit agreement.