Finance

Instant, private, and free

Loss Given Default Calculator.

Calculate loss given default from exposure, recovery, and collateral assumptions.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Exposure at default

Recovery amount

Loss amount

$0.00$

Loss given default

0.00%%

FAQs

How does the lgd calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

Use Cases

Credit Risk Assessment

Banks and financial institutions use LGD to estimate potential losses on defaulted loans, aiding in risk management and capital allocation.

Example: A bank with a $1M loan and $600k recovery can estimate a 40% LGD.

Portfolio Stress Testing

Investors and analysts use LGD to model worst-case scenarios for credit portfolios, helping to set risk limits and pricing.

Example: Stress test a portfolio with varying recovery rates to see impact on losses.

Frequently Asked Questions

What is Loss Given Default (LGD)?: Loss Given Default (LGD) is the portion of an exposure that is lost when a borrower defaults, after accounting for recoveries. It is calculated as (Exposure at Default - Recovered Value) / Exposure at Default, expressed as a percentage.
How do I use this calculator?: Enter the exposure at default (the total amount owed) and the recovered value (amount recovered from collateral or other means). The calculator will compute the loss amount and LGD percentage.
What is a typical LGD range?: LGD varies by asset type and recovery process. For secured loans, LGD can be low (10-30%), while unsecured loans may have higher LGD (50-80%). This calculator helps you estimate based on your inputs.

Tips & Common Mistakes

Tips

Ensure the exposure at default includes all outstanding principal, interest, and fees.
Recovered value should reflect net proceeds after costs of recovery (e.g., legal fees, sale costs).
Use historical recovery data for similar assets to get a realistic estimate.
LGD is often expressed as a percentage; multiply by exposure to get the dollar loss.

Common Mistakes to Avoid

Forgetting to include accrued interest in the exposure at default.
Using gross recovery amount without deducting collection costs.
Confusing LGD with Probability of Default (PD) – they are separate risk components.

Last updated: August 13, 2026

Use Cases

Credit Risk Assessment

Banks and financial institutions use LGD to estimate potential losses on defaulted loans, aiding in risk management and capital allocation.

Example: A bank with a $1M loan and $600k recovery can estimate a 40% LGD.

Portfolio Stress Testing

Investors and analysts use LGD to model worst-case scenarios for credit portfolios, helping to set risk limits and pricing.

Example: Stress test a portfolio with varying recovery rates to see impact on losses.

Frequently Asked Questions

What is Loss Given Default (LGD)?

Loss Given Default (LGD) is the portion of an exposure that is lost when a borrower defaults, after accounting for recoveries. It is calculated as (Exposure at Default - Recovered Value) / Exposure at Default, expressed as a percentage.

How do I use this calculator?

Enter the exposure at default (the total amount owed) and the recovered value (amount recovered from collateral or other means). The calculator will compute the loss amount and LGD percentage.

What is a typical LGD range?

LGD varies by asset type and recovery process. For secured loans, LGD can be low (10-30%), while unsecured loans may have higher LGD (50-80%). This calculator helps you estimate based on your inputs.

Tips & Common Mistakes

Tips

Ensure the exposure at default includes all outstanding principal, interest, and fees.
Recovered value should reflect net proceeds after costs of recovery (e.g., legal fees, sale costs).
Use historical recovery data for similar assets to get a realistic estimate.
LGD is often expressed as a percentage; multiply by exposure to get the dollar loss.

Common Mistakes to Avoid

Forgetting to include accrued interest in the exposure at default.
Using gross recovery amount without deducting collection costs.
Confusing LGD with Probability of Default (PD) – they are separate risk components.

Finance

Instant, private, and free

Loss Given Default Calculator.

Calculate loss given default from exposure, recovery, and collateral assumptions.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Exposure at default

Recovery amount

Loss amount

$0.00$

Loss given default

0.00%%

FAQs

How does the lgd calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

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Use Cases

Credit Risk Assessment

Banks and financial institutions use LGD to estimate potential losses on defaulted loans, aiding in risk management and capital allocation.

Example: A bank with a $1M loan and $600k recovery can estimate a 40% LGD.

Portfolio Stress Testing

Investors and analysts use LGD to model worst-case scenarios for credit portfolios, helping to set risk limits and pricing.

Example: Stress test a portfolio with varying recovery rates to see impact on losses.

Frequently Asked Questions

What is Loss Given Default (LGD)?: Loss Given Default (LGD) is the portion of an exposure that is lost when a borrower defaults, after accounting for recoveries. It is calculated as (Exposure at Default - Recovered Value) / Exposure at Default, expressed as a percentage.
How do I use this calculator?: Enter the exposure at default (the total amount owed) and the recovered value (amount recovered from collateral or other means). The calculator will compute the loss amount and LGD percentage.
What is a typical LGD range?: LGD varies by asset type and recovery process. For secured loans, LGD can be low (10-30%), while unsecured loans may have higher LGD (50-80%). This calculator helps you estimate based on your inputs.

Tips & Common Mistakes

Tips

Ensure the exposure at default includes all outstanding principal, interest, and fees.
Recovered value should reflect net proceeds after costs of recovery (e.g., legal fees, sale costs).
Use historical recovery data for similar assets to get a realistic estimate.
LGD is often expressed as a percentage; multiply by exposure to get the dollar loss.

Common Mistakes to Avoid

Forgetting to include accrued interest in the exposure at default.
Using gross recovery amount without deducting collection costs.
Confusing LGD with Probability of Default (PD) – they are separate risk components.

Last updated: August 13, 2026