Cross Default Clause

Business, Legal & Accounting Glossary

Definition: Cross Default Clause



Full Definition of Cross Default Clause


A cross-default clause is common stipulation under loan agreements in which a bank has a right to deny access to balances in any or all loan accounts to a borrower (with several loans at the same bank) even if only one loan goes into default. In fact, a bank can apply all available balance(s) in all account(s) of the borrower to satisfy any loan in default. Bankers justify this clause on the logic that a default sours the bank client relationship, not a just a loan agreement.


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Cross Default Clause. PayrollHeaven.com. Retrieved July 04, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/cross-default-clause/

Definition Sources


Definitions for Cross Default Clause are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 30th September, 2019 | 7 Views.