Delinquency (Days Past Due)

A loan is delinquent when a scheduled payment is not made by its due date. Lenders measure how serious it is in days past due (DPD), counted from the due date of the oldest unpaid payment. A loan whose June 1 payment is still unpaid on July 15 is 44 days past due, even if the July payment came in.

Lenders group loans into buckets, such as current, 1 to 29 days, 30 to 59, 60 to 89, and 90 or more days past due. US banks report loans 30 to 89 days and 90 or more days past due in their quarterly Call Reports, along with nonaccrual loans, where interest income is no longer recorded.

The delinquency rate is the share of the portfolio that is past due:

Delinquency rate = balance of past-due loans ÷ total loan balance

If $1.5 million of a $30 million portfolio is 30 or more days past due, the 30+ delinquency rate is 5%.

Why it matters for lenders

Delinquency is the earliest hard sign of credit trouble. It feeds almost every other risk process: each loan's risk rating, the loan loss reserve, covenants in the lender's own credit lines, and reports to investors and boards. A rise in 30-day delinquency today often shows up as losses months later.

It also sets the collections clock. Each bucket triggers different steps, and some deadlines come from policy or regulation. For example, US bank guidance generally expects closed-end consumer loans to be charged off at 120 days past due.

The number has to be right. If a returned electronic (ACH) payment is never reversed, or a partial payment counts as a full one, a loan looks current when it is not, and every report built on it is wrong.

How it works in practice

A community development financial institution (CDFI) follows a written cadence. At 1 to 5 days past due, servicing sends a friendly reminder. From 6 to 15 days, the loan officer calls to learn what happened and may offer coaching. From 16 to 30 days, the borrower gets a written notice and a talk about a payment plan or modification. From 31 to 60 days, the lending lead reviews the loan and its risk rating. From 61 days on, the committee considers a workout, collateral action or charge-off.

Every call and promise to pay is logged on the loan, so the next person sees the history. Monthly reports show delinquency by bucket and by funding month.

In spreadsheets, the days-past-due figure is often a formula someone forgets to refresh, and promises to pay live in email. Calculating it every night from the payment history keeps the buckets honest.