Glossary
What is Portfolio at risk (PAR)?
Definition
Portfolio at risk (PAR) is the share of a loan portfolio that is overdue beyond a set number of days: the outstanding balance of loans more than N days late divided by the total outstanding portfolio. PAR30 uses 30 days and PAR90 uses 90. It is the standard measure of loan quality.
The whole outstanding balance of a late loan counts, not just the overdue installment. If a loan with 800 outstanding has one installment 45 days late, all 800 goes into PAR30. Days past due are counted from the oldest unpaid installment.
In a 500,000 portfolio where 40,000 sits in loans more than 30 days late, PAR30 is 8.0%; if 12,000 is more than 90 days late, PAR90 is 2.4%. Watch the trend more than the level, read PAR alongside write-offs and restructured loans, and compare with your own history and funder covenants rather than a generic benchmark.
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