Nonperforming Asset
Definition of 'Nonperforming Asset'A debt obligation where the borrower has not paid any previously agreed upon interest and principal repayments to the designated lender for an extended period of time. The nonperforming asset is therefore not yielding any income to the lender in the form of principal and interest payments. |
|
Investopedia explains 'Nonperforming Asset'For example, a mortgage in default would be considered non-performing. After a prolonged period of non-payment, the lender will force the borrower to liquidate any assets that were pledged as part of the debt agreement. If no assets were pledged, the lenders might write-off the asset as a bad debt and then sell it at a discount to a collections agency. |
Related Definitions
Articles Of Interest
-
Small Business: Speed Up Receivables To Avoid A Cash Crunch
Waiting for customers to pay can be a losing game. Look to factoring for quicker cash. -
What happens if a company doesn't think it will collect on some of its receivables?
The accounts receivable account, or receivables for short, is created when a company extends credit to a customer based on a sale. However, there are times when a company will not collect on ... -
6 Tips For Selling Your Home Fast
Find out what you can do to stand out from the competition and make your home an easy sell. -
Why Your Pension Plan Has Sovereign Debt In It
One type of security pensions tend to invest in is sovereign debt, or debt issued by a government. -
5 Smart Ways To Use Your Tax Return
This year, find out how to stretch your tax refund further to strengthen your future. -
6 Popular ETF Types For Your Portfolio
Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods. -
Top 5 Budgeting Questions Answered
You don't need a degree to understand your money, begin saving and pay down debt. -
Common Liabilities That Hurt Your Net Worth
Every penny that you keep out of the liability side of the net worth equation essentially ends up on the asset side. -
The Dangers Of A Reverse Mortgage
In many circumstances, a reverse mortgage can be a risk to your financial security. Here are six dangers you should consider before signing on the bottom line. -
Automatic Cancellation Of PMI When You're Underwater On Your Mortgage
You might be suprised to learn that after reaching certain criteria, your PMI will be automatically cancelled.
Free Annual Reports