Identify red flags to avoid problem loans.
As you monitor a loan portfolio you need to be able to identify the changes in credit risk that may result in problem loans. Problem loans are loans that present greater than acceptable risk – they cannot be paid according to the terms specified and therefore have a high probability of nonpayment or loss.
To begin, you will learn more about some of the scenarios that raise a red flag. Then you will play the red flag challenge game which will test your ability to identify red flags in a borrower’s financial statements.