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. Subprime Loan

    A type of loan that is offered at a rate above prime to individuals ...
  3. Lien

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

    All financial decisions and activities of an individual, this ...
  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 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. Savings

    Which Are The Best Credit Cards To Take To China?

    Credit cards are now much more widely accepted in China – and one issuer leads the pack, due to its deal with China UnionPay, the Chinese bankcard network.
  7. Credit & Loans

    Chase Sapphire Preferred Vs. AmEx Platinum

    Chase Sapphire Preferred has many rewards and is much cheaper. Is American Express Platinum worth its premium price? That depends.
  8. Credit & Loans

    How to Challenge & Win A Credit Card Dispute

    Found an error on your credit card statement? Five strategies to persuade the card issuer to fix it in your favor.
  9. Credit & Loans

    Review: Barclaycard Rewards MasterCard

    If you're looking for a rewards card and you have an average credit score, this one's worth investigating.
  10. Savings

    Avoid Credit Card Rewards Devaluation At All Cost!

    If you don't know how to redeem your rewards points, we'll show you the easiest way to avoid rewards devaluation this year.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center