Nonperforming Loan - NPL

A sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days. A nonperforming loan is either in default or close to being in default. Once a loan is nonperforming, the odds that it will be repaid in full are considered to be substantially lower. If the debtor starts making payments again on a nonperforming loan, it becomes a reperforming loan, even if the debtor has not caught up on all the missed payments.

Institutions holding nonperforming loans in their portfolios may choose to sell them to other investors in order to get rid of risky assets and clean up their balance sheets. Sales of nonperforming loans must be carefully considered since they can have numerous financial implications, including affecting the company's profit and loss, and tax situations.


Investment dictionary. . 2012.

Look at other dictionaries:

  • nonperforming — [nän΄pər fôr′miŋ] adj. 1. not performing 2. Banking in default but still being carried as an asset on the lender s books [a nonperforming loan] …   English World dictionary

  • Loan modification in the United States — Loan modification, the systematic alteration of contactual mortgage loan agreements, has been practiced in the United States since the 1930s. During the Great Depression loan modification programs took place at the state level in an effort to… …   Wikipedia

  • nonperforming asset — An asset that is not effectively producing income, such as an overdue loan. Bloomberg Financial Dictionary …   Financial and business terms

  • Nonaccrual Loan — A nonperforming loan that is not generating the stated interest rate because of nonpayment from the borrower, typically due to financial difficulties. Nonaccrual loans are more likely to default, meaning that the investor will not recoup his or… …   Investment dictionary

  • Renegotiated Loan — The result of an agreement between a borrower and a lender to modify a loan by taking a loan that a customer was having difficulty paying and turning it into a loan that the customer can pay. The loan may be modified by lowering the interest rate …   Investment dictionary

  • Reperforming Loan - RPL — A loan on which the borrower was behind on payments (delinquent) by at least 90 days but has resumed making payments. The payments that the borrower missed have not necessarily been paid, however. Often, the borrower of a reperforming loan has… …   Investment dictionary

  • Cash Basis Loan — A loan where interest is recorded as earned when payment is collected. Ordinarily, interest income is accrued on loans, since regular payment of both principal and interest is assumed. However, in the case of nonperforming loans (loans gone bad) …   Investment dictionary

  • Problem Loan — In the banking industry, a problem loan is one of two things; it can be a commercial loan that is at least 90 days past due, or a consumer loan that it at least 180 days past due. This type of loan is also referred to as a nonperforming asset.… …   Investment dictionary

  • Non-performing loan — A non performing loan is a loan that is in default or close to being in default. Many loans become non performing after being in default for 3 months, but this can depend on the contract terms. “A loan is nonperforming when payments of interest… …   Wikipedia

  • Uruguay — Uruguayan /yoor euh gway euhn, gwuy euhn/, adj., n. /yoor euh gway , gwuy /; Sp. /ooh rddooh gwuy /, n. 1. a republic in SE South America. 3,261,707; 72,172 sq. mi. (186,925 sq. km). Cap.: Montevideo. 2. a river in SE South America, flowing from… …   Universalium

  • Norwest — For the sniper, see Henry Norwest. This article details the history of Norwest up to the point of the purchase of Wells Fargo Co. For the current company, see Wells Fargo. Norwest Genre Financial Services Fat …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.