Okuzeka
Finance & Banking vocabulary · Loans & Credit

Arrears

Meaning in finance & banking, with examples

/əˈrɪəz/nounCommon term

In finance & banking, arrears means: Money that should already have been paid, such as missed loan instalments, rent or bills. A borrower who has missed payments is 'in arrears'.

In Turkish: gecikmiş borç, birikmiş borç, gecikme

How it is used

Used in collections and credit risk, especially in British banking. Customers fall into arrears, are in arrears with their mortgage or clear their arrears. Banks track arrears in days past due (DPD); loans more than 90 days in arrears are usually treated as non-performing. The word is always plural.

Example sentences

  1. About 2% of our mortgage customers are more than one month in arrears.

  2. The customer agreed a plan to clear her arrears over six months.

Common collocations

  • in arrears
  • fall into arrears
  • clear arrears
  • mortgage arrears
  • days past due
  • defaultFailure to make loan or bond payments as agreed. A borrower is usually treated as in default after missing payments for a set period, often 90 days.
  • non-performing loanA loan on which the borrower has stopped making payments, usually for 90 days or more, or which is unlikely to be repaid in full.
  • repaymentThe act of paying back money you have borrowed, or one of the regular amounts you pay to do this.
  • installmentOne of a series of regular payments used to repay a loan or to pay for something bought on credit.
  • restructuringChanging the terms of a loan, such as the maturity, instalments or interest, because the borrower has difficulty paying; also the reorganisation of a whole company.

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.