Understanding Deleverage

Explain : Deleverage

Deleveraging is when a company or individual attempts to decrease its total financial leverage. In other words, deleveraging is the reduction of debt and the opposite of leveraging. The most direct way for an entity to deleverage is to immediately pay off any existing debts and obligations on its balance sheet. If unable to do this, the company or individual may be in a position of an increased risk of default.