Back to Tools

Loss Given Default (LGD)

Estimate how much a lender loses if a borrower defaults after accounting for collateral recovery, expressed as a percentage of exposure.

Credit Risk Data

Exposure at Default - EAD ($)

Total outstanding amount at the time of default

Recovery Amount ($)

Amount recovered through collateral, liquidation, or collections

About LGD

Loss Given Default measures the percentage of exposure that is lost when a borrower defaults. It is a key component in credit risk modeling and Basel regulatory capital calculations.

Results

Loss Given Default

Recovery Rate

Loss Amount

Exposure at Default:

Recovery Amount:

Net Loss:

Formula

LGD = (EAD - Recovery) / EAD x 100

Recovery Rate = 100% - LGD

LGD is used alongside Probability of Default (PD) and EAD to calculate expected credit losses: ECL = PD x LGD x EAD.

Get Results of Loss Given Default (LGD) via Email

Save your calculations and get detailed breakdowns