The Five Stages of Problem Loan Resolution

It’s always important to identify and address potential problem loans quickly. But these days, with inflation still high, the economy’s path uncertain, and credit risk rising, it’s especially crucial. This article describes stages and steps in the loan resolution process, and how bankers can guide borrowers through challenging times—for the good of the borrower and the bank.

Stage 1: Recognizing a Problem

The first stage is to recognize there is a problem—the sooner t…