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Dianne has a loan agreement which contains a clause for default. What does a clause for default imply?
Suggested Answer: D
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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 :)
12 comments · newest first
KA
Kayleigh
3 days ago
Wait, can they really declare insolvency just like that?
KE
Kerry
8 days ago
Totally agree, it’s a serious situation for borrowers!
EL
Elly
13 days ago
A default clause means the lender can demand full payment.
DA
Daryl
18 days ago
I thought default just meant late fees, not all this!
HE
Herschel
24 days ago
Yup, they can go after a guarantor too if needed.
DO
Dominic
29 days ago
Wait, can they really declare insolvency? That sounds extreme.
AR
Arlette
1 month ago
Totally agree, it's a serious situation for borrowers!
LA
Lashaunda
1 month ago
A default clause means the lender can demand full payment.
AN
Annice
1 month ago
I practiced a similar question where the focus was on the lender's rights, and I think C could be a possibility, but I lean towards D.
DE
Denny
2 months ago
I feel like the default clause could also involve guarantors, so B might be relevant too. It's a bit confusing.
MA
Maryrose
2 months ago
I remember something about lenders being able to call in the loan if there's a default, which sounds like D to me.
KA
Karina
2 months ago
I think a default clause means the lender can demand overdue payments, so maybe A? But I'm not entirely sure.