Problem Loans

Problem Loans Course Overview

Problem Loans present many unique challenges for a financial institution. This course examines what constitutes a problem loan specifically and problem files more generally. We’ll look at the commercial borrowing relationship holistically to help identify the different ways that a client’s standing might deteriorate. Next, we’ll review different loan classifications before using an example pricing model in Excel to demonstrate how deteriorating risk on a file can affect a lender’s profitability. 

Next, we look at how an individual loan officer or credit analyst can differentiate between problem loan symptoms and their underlying causes to help identify early warning signs much more effectively and to get ahead of problem files before they become a serious financial burden for the firm. Finally, we explore some of the options a lender has when trying to work through a problem file, including an in-depth look at an example Watch Report.

Problem Loans Learning Objectives

Upon completing this course, you will be able to:

• Define what a problem loan is.
• Compare different categories of problem loans (and client files). 
• Interpret how problem loans can affect profitability for a financial institution.
• Explain the difference between the symptoms and the causes of problem loans.
• Detect problem loans more proactively by applying a systems thinking framework.
• Compare the different options a lender has when working with a problem file.

Who Should Take This Course?

This Problem Loans course is designed for current and aspiring commercial banking professionals, including relationship managers or loan officers, credit analysts, loan brokers, and adjudicators. This course will prepare you with the knowledge and skills you need to properly handle difficult borrower situations.