Default Rate

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Dictionary Says

Definition of 'Default Rate'

This rate can be used in reference to two main things:

1.  The rate of borrowers who fail to remain current on their loans. It is a critical piece of information used by lenders to determine their risk exposure and economists to evaluate the health of the overall economy.

2.  The interest rate charged to a borrower when payments on a revolving line of credit are overdue. This higher rate is applied to outstanding balances in arrears in addition to the regular interest charges for the debt.
Investopedia Says

Investopedia explains 'Default Rate'

Prior to passage of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, the language in some credit card agreements allowed credit card companies to hike the interest charged on the card balance to the default rate even if consumers were current on their account but had an outstanding balance on another credit card (a practice known as "universal default").

The law, which took effect in the fall of 2009 imposed sweeping new restrictions on the credit industry, including the elimination of the universal default rate.

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Search results for

'Default Rate'

  • CFA Question of the Week 01/11/2005 | Investopedia

    http://www.investopedia.com/professionals/questionoftheweek/cfa/011105.asp
    ... this situation? a) The dollar default rate was 10.8%. b) The ... for any given
    year. d) The default loss rate during the year was 48.1%. ...

  • Junk Bonds No Longer Junk

    http://stocks.investopedia.com/stock-analysis/2012/Junk-Bonds-No-Longer-Junk-JNK-HYG-PHB-BSJF0113.aspx
    ... According to Moody's Investor Service, the trailing 12-month global default rate
    on speculative-grade corporate bonds fell to 1.7% in the fourth quarter of ...

  • Credit Crisis Part 2?

    http://stocks.investopedia.com/stock-analysis/2010/Credit-Crisis-Part-2-F-UIS-ETFC-MCO0211.aspx
    ... In 2009, the high-yield market saw a record default rate of $118.6 billion,
    or 13.7%. The worst hit sectors included automotive, with ...

  • How Risk Free Is The Risk-Free Rate Of Return?

    http://www.investopedia.com/articles/financial-theory/08/risk-free-rate-return.asp
    ... T-bills are assumed to have zero default risk because they represent and are ... for
    granted and used very loosely, especially when it comes to the risk-free rate. ...

  • FHA Money Trouble Causes Concern For Homebuyers - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1211/FHA-Money-Trouble-Causes-Concern-For-Homebuyers.aspx
    ... who borrow with down-payment assistance have a higher rate of loan default, and
    the default rate currently faced by the FHA is up 76% from just a year ago. ...

  • Banks Affected By Increased Loan Defaults

    http://stocks.investopedia.com/stock-analysis/2009/Banks-Affected-By-Increased-Loan-Defaults-WFC-BAC0907.aspx
    ... isolation. The more important statistic is not the default rate, but how
    much the banks have reserved to cover those losses. Capital ...

  • Are High-Yield Bonds Too Risky?

    http://www.investopedia.com/articles/bonds/05/JunkBondRisk.asp
    ... them with new bonds. How would you be able to assess more accurately the
    default rate of a high-yield fund? You could look at what ...

  • Credit Default Swaps: An Introduction

    http://www.investopedia.com/articles/optioninvestor/08/cds.asp
    ... Conclusion Despite these concerns, credit default swaps have proved to be a useful
    portfolio management and speculation tool, and are ... Rate data provided by. ...

  • Shuffle Away Your Debt With Balance Transfers

    http://www.investopedia.com/articles/pf/09/balance-transfer.asp
    ... agreements, such as by forgetting to make a payment, going over your limit, or bouncing
    a check, the interest rate can jump to the default rate, which could be ...

  • Credit Default Swaps: What Happens In A Credit Event?

    http://www.investopedia.com/articles/bonds/09/what-happens-to-single-name-cds.asp
    ... This is representative of the evolution and maturity of any financial product.
    (To learn more about CDSs, check out Credit Default Swaps ... Rate data provided by. ...

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Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
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