What is bad loan?

Wednesday, 05 November 2014 20:25
Bad loan

Try to understand, what is bad loan?

Outstanding under the Contract can be classified as a bad (bad loan) one if there are criteria determined for potential bad loan and one of the characteristics:

  1. Past-due under the Contract with the term of more than 90 calendar days;
  2. Stable financial incapability/unwillingness to fulfill obligations under the Contract;
  3. Full loss of connection with the Customer, change of address, contacts; detection of facts which are the risk of loan not to be repaid;
  4. Lose of collateral (alienation of collateral, declaring collateral agreements invalid, etc.).
  5. Initiation of bankruptcy case of the Customer/Collateral provider/Guarantor.
  6. If Credit Committee / Bad Credit Committee makes decision on acknowledgment of outstanding as a bad loan.   

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