What does a clause for default imply?

Dianne has a loan agreement which contains a clause for default.

What does a clause for default imply?
A . this allows the lender to demand overdue payments are made straight away
B. this allows a lender to demand payment from a guarantor if the borrower is unable to pay
C. this allows the lender to declare insolvency
D. this allows the lender to demand full payment of the outstanding balance

View Answer

Answer: D

Explanation:

A Clause for Default ‘allows the lender to demand full payment of the outstanding balance’. See p.102. And always read the small print before you sign a loan agreement 🙂