Delinquency Rate

AAA

DEFINITION of 'Delinquency Rate'

The percentage of loans within a loan portfolio that have delinquent payments. The delinquency rate is simply the number of loans that have delinquent payments divided by the total number of loans an institution holds. Typically, delinquency rates on loans are affected by the credit quality of the borrower and macroeconomic factors such as unemployment.

INVESTOPEDIA EXPLAINS 'Delinquency Rate'

For example, if a financial institution has a loan portfolio of 1,000 loans and 100 of those loans have delinquent payments greater than a few months, the delinquency rate would be 10% (100/1,000). Typically, only loans that have payments more than three months overdue are considered delinquent.

RELATED TERMS
  1. Cross-Border Financing

    This term refers to any financing arrangement that crosses national ...
  2. Lien

    The legal right of a creditor to sell the collateral property ...
  3. Personal Finance

    All financial decisions and activities of an individual, this ...
  4. Creditor

    An entity (person or institution) that extends credit by giving ...
  5. Loan

    The act of giving money, property or other material goods to ...
  6. Prime Rate

    The interest rate that commercial banks charge their most credit-worthy ...
RELATED FAQS
  1. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  2. What types of liens are seen as good and which are bad for my credit?

    Creditors that allow purchases to be made through financing often require property to be pledged against a credit account; ... Read Full Answer >>
  3. What is the best way to start to rebuild your credit after a bankruptcy?

    Bankruptcies can be devastating to your credit score. Even worse, a bankruptcy will be listed on your credit report for between ... Read Full Answer >>
  4. What is the difference between a possessory and a non-possessory lien?

  5. Why is more interest paid over the life of a loan when it is capitalized?

    More interest is paid over the life of a loan when that interest is capitalized because the capitalized interest is added ... Read Full Answer >>
  6. What are the differences between Chapter 7 and Chapter 13 bankruptcy?

    In the United States, the most common kinds of personal bankruptcy filings are under Chapter 7 or Chapter 13 proceedings. ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Understanding Your Mortgage

    We walk through the steps needed to secure the best loan to finance the purchase of your home.
  2. Credit & Loans

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  3. Credit & Loans

    How Credit Card Delinquency Works

    The more you understand about delinquency, the better prepared you'll be to handle it.
  4. Options & Futures

    Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.
  5. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  6. Economics

    What is a Subprime Mortgage?

    Subprime mortgages are offered to borrowers with low credit ratings, usually 600 or below.
  7. Credit & Loans

    American Express Cards: Centurion Vs. Platinum

    If you're offered a coveted black card from AmEx, should you accept it?
  8. Credit & Loans

    What's a Hire Purchase?

    Hire purchase is a term used in Great Britain to describe an installment plan payment arrangement.
  9. Credit & Loans

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
  10. Credit & Loans

    Credit Cards Offering The Most Airline Miles

    Besides one mile for every dollar spent on purchases, you can rack up thousands more – up to 50,000 – thanks to these cards' intro offers and bonus points.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!