1. 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.

Second, attach importance to loans. Although the borrower has the ability to repay the loan principal and interest at present, 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%.

Third, subprime loans. There are obvious problems in the borrower's repayment ability, and it is impossible to repay the loan principal and interest in full by relying entirely on its normal operating income. Interest needs to be repaid by disposing of assets, financing from outside and even implementing mortgage guarantee. The probability of loan loss is 30%-50%.

4. Suspicious loans. The borrower can't repay the loan principal and interest in full, even if the mortgage or guarantee is implemented, it will certainly cause some losses, just because of the factors such as borrower's reorganization, merger, mortgage disposal and pending litigation, the amount of losses is still uncertain, and the probability of loan losses is between 50% and 75%.

5. Loan losses. Refers to 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 be lost, or even if a small part can be recovered, its value is minimal. From the bank's point of view, it is meaningless and necessary to keep it as a bank asset in the accounts. Such loans should be cancelled immediately after the necessary legal procedures are performed, and the loan loss probability is 75%- 100%.