1, normal loan. This classification means that the borrower has been able to repay the loan on time without overdue;
2. Pay attention to loans. This classification means that borrowers can repay loans, but some factors will affect borrowers' normal repayment;
3. Subprime loans. This classification means that the borrower has obvious repayment problems and needs the borrower to apply for mortgage or guarantee to solve them;
4. Suspicious loans. This classification means that the borrower has been unable to repay the loan on time, even if there is a mortgage or guarantee bank, there will be some losses;
5. Loan losses. This classification means that banks cannot recover the loan funds, which will cause greater losses.
Early classification
Before 1998, the loan classification method of China commercial banks basically followed the provisions of the Financial System of Financial and Insurance Enterprises promulgated by the Ministry of Finance in 1993, and classified loans into four types: normal, overdue, sluggish and bad debts. The latter three types are collectively referred to as non-performing loans, which are referred to as "one excess and two retention" in China. Overdue loans refer to overdue loans, which are overdue as long as they exceed one day; A sluggish loan refers to a loan that is overdue for two years or less, but its business has stopped and the project has been dismounted; Bad debts refer to loans that cannot be recovered and need to be written off according to the relevant regulations of the Ministry of Finance. Most of the non-performing loans of China commercial banks have formed a historical problem that should be written off but not written off.
This classification method is simple and feasible, and it really played an important role under the enterprise system and financial system at that time. However, with the gradual deepening of economic reform, the disadvantages of this method have gradually emerged, which can no longer meet the needs of economic development and financial reform. For example, an unexpired loan, regardless of whether there is a problem in fact, is regarded as normal, and the standard is obviously unknown. For another example, it seems too strict to classify loans overdue for one day as non-performing loans. In addition, this method is an after-the-fact management method, and it will only be shown as a non-performing loan in the bank account after the loan period is exceeded. Therefore, it is very important to improve the quality of bank loans. It is often powerless to take some protective measures against the problem loans in advance. Therefore, with the outstanding problem of non-performing loans, this classification method has reached the point where it must be changed.