Days past due and loan aging: how to measure and report late loans
By the LoanTabs teamPublished Last updated 5 min read
Short answer
Days past due (DPD) is the number of days since a loan's oldest unpaid installment was due. Loan aging groups loans into buckets by DPD, such as current, 1-30, 31-60, 61-90, 91-180 and 181+ days, so you can see how much of the portfolio is late and how late. It is the base for PAR and provisioning.
"Late" is not one thing. A borrower who is three days behind and one who is three months behind are different problems, and lumping them together hides the risk. Days past due and loan aging give lateness a number, so you can measure it, report it and act on it.
What is days past due?
Days past due is the count of days between the due date of the oldest installment that is not fully paid and today. If the installment due on 1 March is unpaid on 20 March, the loan is 19 days past due.
Three rules keep the count consistent:
- Count from the oldest unpaid installment. If several installments are overdue, the earliest one sets the DPD.
- A partial payment does not necessarily reset the clock. If the installment is still not fully paid after allocation, it stays overdue. How payments are allocated matters, as it decides which balances are cleared first. See repayment allocation order.
- A grace period is a policy, not a different count. If you allow 5 days before a loan is treated as late, say so, and apply it consistently.
A worked example
A borrower has a 12-month loan with installments due on the first of each month.
- Installment 3 was due on 1 March and was not paid.
- Installment 4 was due on 1 April and was not paid.
- Today is 20 April.
The oldest unpaid installment is number 3, due on 1 March, so DPD = 50 days (31 days from 1 March to 1 April, plus 19 more to 20 April). The loan sits in the 31-60 bucket even though installment 4 is only 19 days late.
What is loan aging?
Loan aging (also called an aging report or arrears aging) groups the portfolio into buckets by DPD and reports the outstanding balance and number of loans in each. Common buckets are:
| Bucket | Meaning |
|---|---|
| Current | Not overdue |
| 1 to 30 days | Early arrears |
| 31 to 60 days | Arrears with a pattern forming |
| 61 to 90 days | Serious arrears |
| 91 to 180 days | High risk of loss |
| 181+ days | Likely loss |
Some lenders use different cut-offs, such as 1-7, 8-30 and 31-90, and some regulators prescribe their own. Whatever you choose, keep the buckets consistent so you can compare over time.
Reading an aging report
A typical report lists each bucket with the number of loans, the outstanding balance and its share of the portfolio. For example, with a 500,000 portfolio:
| Bucket | Loans | Balance | Share |
|---|---|---|---|
| Current | 158 | 430,000 | 86.0% |
| 1-30 | 14 | 30,000 | 6.0% |
| 31-60 | 8 | 20,000 | 4.0% |
| 61-90 | 3 | 8,000 | 1.6% |
| 91-180 | 3 | 7,000 | 1.4% |
| 181+ | 2 | 5,000 | 1.0% |
What to look at:
- The total outside Current. Here 14% of the portfolio is overdue to some degree.
- The shape. Most of it in 1-30 is a normal cycle of small delays; a swelling 31-90 range means problems are aging rather than being resolved.
- Change over time. Compare with last week and last month. A bucket that grows consistently needs a response.
- Concentration. Split by officer, branch and product to find where lateness comes from.
From aging to PAR and provisions
Two of the most important risk measures come straight from the aging report:
- Portfolio at risk. Add the balances in the buckets beyond a threshold. Here PAR30 is (20,000 + 8,000 + 7,000 + 5,000) ÷ 500,000 = 8.0%. See what is portfolio at risk.
- Provisions. Apply a percentage to each bucket, rising with age, to estimate expected losses. See loan loss provisioning.
Roll rates
A roll rate shows how loans move between buckets over a period: for example, the share of loans in 1-30 that moved to 31-60 next month. If roll rates are high, lateness is turning into serious arrears. Low roll rates mean you are resolving problems. Roll-rate analysis needs consistent history, which is another reason to keep buckets fixed.
Common mistakes
- Counting from the wrong installment. Use the oldest unpaid one.
- Not accounting for partial payments or allocation order.
- Changing bucket definitions and losing comparability.
- Restructuring loans and resetting DPD without recording it, which flatters the report.
- Ignoring the number of loans, only balances. A few large loans can hide many small ones.
- Reporting only monthly. Weekly reviews catch problems earlier.
Aging in LoanTabs
LoanTabs includes an aging report with these buckets (current, 1-30, 31-60, 61-90, 91-180 and 181+ days), alongside the delinquency worklist, daily collection sheet, portfolio at risk, collections performance, a configurable provisions matrix with loan classification (standard, watch, substandard, doubtful and loss), and vintage and roll-rate analysis. Payments follow a repayment order you set per product, which decides what a partial payment clears. See collections and arrears reports and the wider collections guide.
FAQ
What does days past due mean?
The number of days since the oldest unpaid installment on a loan was due.
What are aging buckets?
Ranges of days past due, such as 1-30 or 31-60, used to group loans by how late they are.
How is loan aging different from PAR?
Aging shows the distribution of lateness across buckets. PAR adds up the buckets beyond a threshold into a single risk percentage.
Does a partial payment reduce days past due?
Only if it fully pays the oldest unpaid installment. Otherwise the installment remains overdue, and its age continues to count.
How often should I review the aging report?
Weekly for operations and monthly for management and reporting.
Run an aging report on your own loan book: 30-day free trial, no credit card.
Key terms in this guide
See how LoanTabs handles this in practice.
Keep reading
- What is portfolio at risk (PAR)? Formula, PAR30 vs PAR90 and examplesPortfolio at risk (PAR) measures the share of a loan portfolio that is overdue. Learn the formula, PAR30 vs PAR90, worked examples and healthy benchmarks.
- Loan collections and arrears management: a practical guide for lendersHow to manage loan arrears and collections: the collections cycle, key metrics like PAR and days past due, daily routines, policies and the reports you need.
- Loan repayment allocation order: what a payment pays off firstHow lenders allocate a loan repayment across penalties, fees, interest and principal, why the order matters for partial payments, and how to set it.
- How to reduce loan defaults: 12 practical steps for small lendersPractical steps to reduce loan defaults and arrears: better underwriting, right-sized loans, early follow-up, incentives, monitoring and honest reporting.