There are many kinds of loans. Commercial banks classify loans into five categories according to the actual repayment ability of borrowers. Here is a brief introduction to these five kinds of loans.
Normal loan: the borrower can perform the contract and always repay the principal and interest normally. There are no negative factors that affect the timely and full repayment of loan principal and interest. The bank is fully confident that the borrower can repay the loan principal and interest in full and on time. The probability of loan loss is 0.
Pay attention to the loan: Although the borrower has the ability to repay the loan principal and interest, there are some factors that may adversely affect the repayment. If these factors persist, the borrower's repayment ability will be affected and the probability of loan loss will not exceed 5%.
Sub-prime loan: The borrower has obvious problems in repayment ability, and can't fully repay the principal and interest of the loan by relying entirely on its normal operating income. It needs to repay the interest by disposing of assets, financing from abroad or even implementing mortgage guarantee. The probability of loan loss is 30%-50%.
Suspicious loan: the borrower can't repay the loan principal and interest in full, even if the mortgage or guarantee is implemented, it will definitely cause certain losses, but the amount of losses is uncertain due to the borrower's reorganization, merger, merger, mortgage disposal, pending litigation and other factors, and the probability of loan losses is between 50% and 75%.
Loss loan: the possibility that the borrower has repaid the principal and interest for free. No matter what measures and procedures are taken, the loan is bound to lose money.