The risk that borrowers are unable to repay their loans on time is called:

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Credit risk is the risk that a borrower is unable to repay their loans on time. Sovereign risk refers to the risk that a government may default on its debt obligations, currency risk refers to the risk that fluctuations in currency exchange rates may adversely affect an investment, and liquidity risk refers to the risk that an investment may not be sold quickly enough to prevent a loss.

The Risk That Borrowers Are Unable to Repay Their Loans