Define: Cross Default Clause

UK 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.


Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Cross Default Clause. Payroll & Accounting Heaven Ltd. February 27, 2020
Chicago Manual of Style (CMS):
Cross Default Clause. Payroll & Accounting Heaven Ltd. (accessed: February 27, 2020).
American Psychological Association (APA):
Cross Default Clause. Retrieved February 27, 2020, from website:

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.