Non-performing loans

Loans that are no longer being repaid as agreed. In most cases, the borrower has missed interest or principal payments for a defined period, which signals financial distress and a higher risk of default.

Example

A bank may classify a loan as non-performing if the borrower has missed scheduled payments for 90 days or more. Non-performing loans can weaken a lender's financial position because they carry a higher chance of default and lost income. To manage them, financial institutions often use collection strategies, loan restructuring, or asset recovery actions.