Bad loans, although they have a very accurate terminology, should be regarded in the following manner –
Bad loans for the lender – This is actually the official definition: a loan that will not be repaid on time and has a large chance of not being repaid at all. The lender stands to lose all or part of the loan, plus the interest rate that would have been paid.
Bad loans for the borrower – Although these loans don’t carry the official “bad loans” term, they are very bad, since they are ones that the borrower cannot hope to repay while maintaining a reasonable living conditions. Excessive loan fees and inflated interest rates, that some borrowers get simply because their credit score will not allow them to get a better loan, make for very bad loans. This is not necessarily bad for the lenders, since they have their ways of getting their money back. Ways that are not good for the borrowers, to put it mildly.