Default

What does it mean?
1. The failure to promptly pay interest or principal when due.

2. The failure to perform on a futures contract as required by an exchange.

In Other Words...
If you can't make the monthly loan service payments then you are said to have "defaulted" on the loan.

Related Links
Bond Basics Tutorial - What are bonds and do they belong in your portfolio? Get all the answers in this comprehensive tutorial.

Corporate Bonds: An Introduction to Credit Risk - Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.

Junk Bonds: Everything You Need to Know - Don't be fooled by the name--junk bonds may be for you if you know how to analyze them.

Related Terms
Cross Default | Default Risk | Futures Contract | Interest | Non-Performing Loan | Principal | Whoops

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