What refers to the risk that the borrower is unable or unwilling to fulfill the terms promised under the loan contract?

Question

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Default risk refers to the possibility that the borrower will be unable or unwilling to fulfill the terms of the loan, such as making the required payments. This risk is highest in situations where the borrower has a history of default, has a high level of debt relative to their income, or is subject to economic or industry-specific risks.

What Refers to the Risk That the Borrower Is Unable