How to use this calculator
- Enter exposure at default, net recovery after collection costs.
- Choose a display currency, then select Calculate. Results also update after a brief pause while you edit.
- Read the result with the assumptions below. Export details or save a second scenario to compare your choices.
Formula and method
LGD=(exposure−net recovery)/exposure.
Assumptions and limitations
Net recovery should reflect appropriate costs and valuation date; no default probability is inferred.
Worked example
With exposure at default = 100000, net recovery after collection costs = 60000, loss given default is approximately 40%.
What the result means
Estimate the loss fraction conditional on a default having occurred.
Common questions
How should I interpret loss given default?
Estimate the loss fraction conditional on a default having occurred.
What should I check before using this result?
Net recovery should reflect appropriate costs and valuation date; no default probability is inferred.
Methodology and transparency
Calculation specification reviewed on 2026-10-14. Mathematical implementation is tested against independent reference fixtures. This does not imply review by a licensed financial professional. Read the testing and precision policy.