Hello! At present, commercial banks classify the loan quality into five categories according to the borrower's actual repayment ability, that is, according to the degree of risk, loans are divided into five categories: normal, concerned, secondary, suspicious and loss, and the latter three categories are non-performing loans.

The following information comes from Baidu Encyclopedia:

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 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%.

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 through asset disposal, external financing and even 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 some losses, but the amount of losses is still uncertain because of the borrower's reorganization, merger, mortgage disposal and pending litigation, and the probability of loan losses is between 50% and 75%.

Loss loan

It 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 very small. 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 written off immediately after the necessary legal procedures are performed, and the probability of loan loss is 75%- 100%.

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