performing nonperforming loan

performing nonperforming loan

A loan on which all payments are made on time but the collateral has decreased in value so that it is no longer sufficient to support the loan. FDIC regulations require the lender to classify the loan as nonperforming. In such a situation, the lender will require additional collateral or will demand payment in full.

References in periodicals archive ?
Because a performing borrower is more likely than a nonperforming borrower to repay a loan, the amount of loan loss reserves for performing nonperforming loans should be somewhat lower than for other nonperforming loans.