Delinquency Rate

A delinquency rate is a measure of the percentage of borrowers who are late on their loan payments. It is calculated by dividing the number of borrowers who are 30 days or more past due on their payments by the total number of borrowers.

Delinquency rates can be used to measure the health of a loan portfolio and to identify borrowers who are at risk of default. Lenders typically monitor delinquency rates closely and may take action to collect overdue payments or to foreclose on a property if a borrower's delinquency continues.

There are a number of factors that can contribute to a high delinquency rate, including:

* Economic conditions: A recession or other economic downturn can make it difficult for borrowers to make their loan payments.
* Unemployment: If a borrower loses their job, they may be unable to make their loan payments.
* Illness or disability: A borrower who becomes ill or disabled may be unable to work and may not be able to make their loan payments.
* Death: If a borrower dies, their estate may be unable to make the loan payments.

Delinquency rates can also vary depending on the type of loan. For example, delinquency rates for subprime mortgages are typically higher than delinquency rates for prime mortgages.

Delinquency rates are an important indicator of the health of a loan portfolio and can be used to identify borrowers who are at risk of default. Lenders typically monitor delinquency rates closely and may take action to collect overdue payments or to foreclose on a property if a borrower's delinquency continues.