Default Rate

Default rate is the proportion of borrowers or obligations defaulting during a specified period under a stated definition.

Why this matters to income investors

The proportion of failed borrowers helps assess whether promised interest is likely to be collected.

How to use default rate in your research

Read the borrower or issuer disclosures for collateral, payment priority, covenant terms, and missed payments. Then check how a deterioration could reduce interest income or the value available to support future dividends.

This material is general education and information, not individualized investment, tax, or legal advice.