Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Non Performing Loan
A loan in or near default. According to the International Monetary Fund, a non-performing loan is any loan in which: interest and principal payments are more than 90 days overdue; or more than 90 days' worth of interest has been refinanced, capitalized, or delayed by agreement; or payments are less than 90 days overdue but are no longer anticipated. Another definition of a non-performing loan is one in which the maturity date has passed but at least part of the loan is still outstanding. The specific definition is dependent upon the loan's particular terms.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
An asset that produces no income. For example, a loan on which the borrower is not making payments is often described as a nonperforming asset. Firms often continue to include these assets, which are of questionable value, on their financial statements because they do not wish to show the losses entailed in writing them off. Also called nonperforming loan. Compare underperforming asset.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.