Define: Default

UK Accounting Glossary

Definition: Default


Quick Summary of Default


Failure to meet obligations as they fall due for payment.



What is the dictionary definition of Default?

Dictionary Definition


  1. finance The condition of failing to meet an obligation.
  2. electronics, computing the original software programming settings as set by the factory
  3. A loss incurred by failing to compete.

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Full Definition of Default


A default can be generally defined as a failure of a debtor to make timely payments of principal and interest. Thus, when one is in default, a person or a company is said to default on a loan or other official financial obligation. Default also occurs when a debtor fails to sufficiently meet any timely provisions of a bond, mortgage, lease, or futures contract. Before extending credit, banks, lenders, as well as debt and equity issuing entities take into consideration default risk, i.e. a possibility that a company or an individual will not honour a debt commitment. Some borrowers with higher-than-average default risk must pay a compensatory default premium. Default premium would constitute a higher bond yield offered by a company with scanty financial tenets. Default premium is also frequently paid by individuals with poor credit, typically in a form of above-market interest rates.


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Synonyms For Default


failure, nonpayment, neglect, lack, arrears


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
https://payrollheaven.com/define/default/
Modern Language Association (MLA):
Default. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 24, 2020 https://payrollheaven.com/define/default/.
Chicago Manual of Style (CMS):
Default. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/default/ (accessed: February 24, 2020).
American Psychological Association (APA):
Default. PayrollHeaven.com. Retrieved February 24, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/default/

Definition Sources


Definitions for Default are sourced/syndicated and enhanced from:

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

This glossary post was last updated: 23rd December 2018.