# Non-Performing Loan

*Banking & Payments — Finicade finance glossary*

A non-performing loan is one where payments are 90 days or more overdue, or repayment in full is otherwise unlikely. The NPL ratio is the standard asset-quality measure for a banking system, and it moves late in a downturn — a lagging indicator that becomes a leading indicator of restricted lending, since capital tied up in bad loans cannot support new ones.

**Also known as:** NPL, bad loan, impaired loan

**Related terms:** [Loan Loss Provision](https://finicade.com/glossary/loan-loss-provision), [Delinquency](https://finicade.com/glossary/delinquency), [Credit Risk](https://finicade.com/glossary/credit-risk), [CAMELS Rating](https://finicade.com/glossary/camels-rating), [Recovery Rate](https://finicade.com/glossary/recovery-rate)

Source: https://finicade.com/glossary/non-performing-loan