universal default
Definition
The process of a lender resetting the interest rate on a loan or credit card to the default rate. The universal default is explained in the terms and conditions provided by the lender to the borrower. It also explains what actions will cause the universal default to take effect. Most lender resort to the universal default when a borrower makes a late payment or goes over the credit line supplied. However, in some cases the lender may resort to the universal default based on the status of credit markets.
Use universal default in a sentence
“ The woman must now pay the universal default rate on her credit card because she made too many late payments and her credit score dropped. ”
“ They knew they had to keep up with their minimum payment or the credit card company could raise the interest to the universal default rate. ”
“ The credit card came with a low interest rate initially but when the customer failed to make two on time payments the universal default rate went into affect which proved to be very costly for the customer. ”
