When is a loan in default?

Updated 10 months ago

Sometimes, borrowers will miss a repayment. Most of the time, they get back on track and continue to pay back their loan.

But if they miss 4 months' worth of repayments, we then classify their loan as in default.

When a loan enters default, the value of the loan drops to 0. We’ll actively work with the borrower to collect on these loans, and anything we recover we pass back to you.

We also periodically sell groups of defaulted loans to a specialist debt purchasing company. This offers a faster way to help make higher recoveries on some defaulted loans in your loan book. When we do this, we’ll let you know by email.

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