What is a Classified Loan?
Classified loans are bank loans that have been issued according to the terms and regulations of the bank, but later become somewhat suspect by the bank examiners. Often, this takes place when information that was not available at the time of issue is uncovered, or circumstances with the borrower undergo some sort of change. A classified loan is not understood to be a bad risk, but may be considered worth watching more closely than other classifications of loans. In some cases, a bank examiner may come across a loan that was made to a borrower who appears to be somewhat marginal in the ability to repay the loan balance. It is not unusual for some bankers to extend loans to long time clients who are temporarily undergoing a financial downturn, based on past payment records with the banks. The examiner, however, may also consider the current credit rating of the individual to be questionable and feel that the bank is at additional risk. When this evaluation is made, the transaction is lis
” Classified loans are bank loans that have been issued according to the terms and regulations of the bank, but later become somewhat suspect by the bank examiners. Often, this takes place when information that was not available at the time of issue is uncovered, or circumstances with the borrower undergo some sort of change. A classified loan is not understood to be a bad risk, but may be considered worth watching more closely than other classifications of loans. . In some cases, a bank examiner may come across a loan that was made to a borrower who appears to be somewhat marginal in the ability to repay the loan balance.
