default rate

Definition

The rate at which debt holders default on the amount of money that they owe. It is often used by credit card companies when setting interest rates, but also refers to the rate at which corporations default on their loans. Default rates tend to rise during economic downturns, since investors and businesses see a decline in income and sales while still required to pay off the same amount of debt.

Use default rate in a sentence

You need to try and do your best to always avoid the default rate or you will really ruin your credit.

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My default rate, in which my contract specifies throughly will be initated in time for the opening of my business.

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There was a default rate that was going on and we all knew it, and we all figured that everything would go back to normal.

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default risk universal default