non-accrual loan

Definition

A loan that has been re-classified due to nonconformance with the terms of the loan, specifically if loan interest has not been paid for 90 days, at which point it must be converted to "cash-basis" status. Loans backed by collateral, such as mortgages and some installment loans, typically don't convert to cash basis status.

Use non-accrual loan in a sentence

You may want to try and take on a non-accrual loan that will allow you to have greater flexibility in the future.

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It was a non-accrual loan and that was a certain type of loan that we would have to work with in the near future.

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To return anon-accrual loan to accrual status there are a few rules or guidelines that should be followed. Any loan that meets the following criteria can be returned to accrual status.

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nonaccrual experience method (NAE) nonagent