
In financial terms, a defaulted loan refers to the failure of repaying the debt taken from any financial institutions or banks in general. Any individual, who has failed to meet the policies of a debt agreement by not paying back in time, is referred to a defaulter. As per the financial rules or norms, each time you take or receive a credit or a loan from a lender, you have to sign the maintenance terms set with the repayment plan of the loan. This repayment term offers the full explanation regarding the schedule and other conditions attached with the repayment process. The time limit mentioned in the plan might differ from monthly to being weekly. In case, you miss to pay back the loan in time, the lender categorizes it as a defaulted loan.