Commercial banks generally classify loans into five categories: normal, concerned, secondary, doubtful and loss. Non-performing personal loans include the last three types of loans in the five-level classification, namely subprime loans, doubtful loans and loss loans. Generally speaking, the loan risk is classified quantitatively first, that is, according to the number of consecutive defaults (periods) of borrowers, and then classified qualitatively, that is, the quantitative classification results are revised and adjusted according to the nature of borrowers' defaults and the degree of loan risk. The loan risk classification should follow the principle of indivisibility, that is, a loan can only be in one loan form, but not in multiple loan forms at the same time.