underwater loan
Definition
Loan that has gone under its book value because (1) it is non-performing (repayments are late or uncertain), (2) its interest rate is below the current market rate on loans of similar amount and terms, (3) the market value of its collateral has decreased to less than the amount of the outstanding loan balance, or (4) the collateral is not the principal source of loan's payment.
underwater loan is in the Accounting & Auditing and Banking, Commerce & Finance subjects.
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