Default
Failure to repay a loan according to its terms. Usually declared after 90 to 120 days of missed payments, depending on lender and product.
Full definition
Default is the formal status of a loan after the borrower has failed to make payments for an extended period, typically 90 to 120 days for unsecured personal loans. Consequences include the lender charging off the loan, transferring it to a collection agency, and in some states pursuing the borrower in court for the balance. Default has a severe and long-lasting impact on credit.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
- Installment loanA loan repaid in fixed monthly payments over a set term. Personal loans, auto loans, and mortgages are all installment loans.
- Revolving creditCredit you can repeatedly draw on up to a limit, with a minimum monthly payment based on the current balance. Credit cards and HELOCs are revolving.
- Prepayment penaltyA fee some lenders charge if you pay off the loan before the scheduled end of the term. Most U.S. personal loans do not have one.
- Late feeA fee charged when you don't make a loan payment by its due date. Typically $15 to $40 depending on the lender and state.
- DelinquencyMissing a scheduled payment by 30 days or more. Reported to credit bureaus and a major negative factor in credit scoring.
- Charge-offAn accounting action a lender takes after concluding a debt is unlikely to be repaid. Doesn't erase the debt; it stays on your credit report.
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