A digital default option pays a stated amount in the event that a portion of the loan is not paid.

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A digital default option is a feature of some loans where a predetermined amount is paid out if the borrower defaults on a portion of the loan payment. This option is usually included in loans for high-risk borrowers or in situations where there is uncertainty about the borrower's ability to make timely payments.

A Digital Default Option Pays a Stated Amount in the Event