(1) Guarantor for auction or recovery of collateral: At present, few loans in banks can be said to be pure credit loans. Generally speaking, loans are guaranteed by collateral or guarantor. Therefore, after the occurrence of non-performing loans, the bank will sue through the court, auction the collateral or recover from the guarantor in the case of hopeless collection. If we can recover all the best, we will continue to reserve the right to recover the difference.
(2) Asset transfer: If the bank's collateral has been auctioned or failed to recover from the guarantor, then the bank will generally think that the loan is impossible to recover, and will package the non-performing loans into non-performing asset packages and sell them to professional asset management companies at low prices. Asset management companies specialize in purchasing and disposing of such non-performing assets. Compared with banks, they have better collection methods and time, and the probability of successful collection is higher than that of banks. And the price of non-performing assets of banks is low. As long as one or two assets are successfully recovered, it is possible to restore the entire asset package, so in reality, several major asset management companies are doing well at present.