A loan default occurs when a borrower fails to meet the legal obligations of a loan agreement, typically by missing payments. This can happen with various types of loans, including mortgages, personal loans, and student loans. When a borrower defaults, the lender may take actions to recover the owed amount, which can include charging late fees or initiating collection processes. Defaulting on a loan can have serious consequences for the borrower. It can lead to a damaged credit score, making it harder to obtain future loans or credit. In some cases, the lender may also pursue legal action or seize collateral, such as a car or home, depending on the terms of the loan agreement.