Personal Finance Defaulted on a loan? Here's how you can avoid getting into a debt trap Updated : January 22, 2020 11:37 AM IST According to Bhavin Patel, founder and CEO, LenDenClub, an individual is expected to default on his or her loan at least once in life. In banking, commercial loans are considered defaulted if the debtor has made zero payments of interest or principal within 90 days. A loan default occurs when a borrower is not able to pay the EMI amount with interest to the financial institution as per the loan agreement. Subscribe to Moneycontrol PRO at just Rs.33/- per month for the first year. Use code SUPERPRO. Limited period offer. Available on Web and Android.