What does a clause for default imply?

Dianne has a loan agreement which contains a clause for default.

What does a clause for default imply?
A . this allows the lender to demand overdue payments are made straight away
B. this allows a lender to demand payment from a guarantor if the borrower is unable to pay
C. this allows the lender to declare insolvency
D. this allows the lender to demand full payment of the outstanding balance

Answer: D

Explanation:

A Clause for Default ‘allows the lender to demand full payment of the outstanding balance’. See p.102. And always read the small print before you sign a loan agreement 🙂