Technical default occurs only when the borrower fails to make interest and principal payments when due.

Technical Default

A failure to meet some specific terms of a loan agreement, lease, or another contract, other than the failure to make payments as and when they fall due.

Interest Payments

Payments made by a borrower to a lender, consisting of the cost of borrowing money over a period of time.

Principal Payments

Payments made towards the original amount borrowed in a loan, excluding interest payments, thereby reducing the outstanding principal balance.