Non Performing Loans

A Non-Performing Loan (NPL) is a loan that is in default or close to default, meaning that the borrower has not made the scheduled payments of principal or interest for a specified period of time. Although the exact elements on nonperforming status can vary depending on the specific loan terms, “No Payment” is usually defined as Zero Payments of either Principal or Interest. The Specific period also varies, depending on the industry and the type of loan. Generally, however, the period is 90 days to 180 days.

NPLs are considered bad debts and can have a negative impact (reduces income and increases risk of loss) on Banks, Credit Unions and Lenders who depend on interest payments to succeed. To recover NPLs and free up capital, creditors might try one of the following potential executions:

  • Repossessing the collateral;
  • Selling NPLs to collection agencies;
  • Restructuring the loan terms; or
  • Selling NPLs to other banks or investors.

The last execution above is where Royal American Financial can offer you their expertise at locating an investor interested in buying your Non-Performing Loans thus allowing you to focus your attention on performing loans that bring in income to your bottom-line.

Contact Royal American Financial today to discuss your options!