Nonperforming loan

Loan where the borrower has failed to repay on time or in full, but which are not considered to be in default; the borrower has not ´performed´ - i.e. met the legal terms of a contract - but the creditor is still booking interest due. These loans represent trouble for banking institutions, which will often reschedule the debt with different conditions, rather than allowing it to lie on the books without producing any return.