Many factors are taken into consideration by banks and financial institutions when calculating a borrower’s CIBIL Score. DPD is one of the most significant parameters in a CIBIL Report. In the banking industry, borrowers should know how to spell Days Past Due. Days Past Due is the full form of DPD in the banking sector. This blog will explain DPD in banks.
What is DPD ?
DPD displays the number of days that the borrower has delayed the payment. Lenders use DPD formula to determine the creditworthiness of borrowers. The higher the DPD is, the greater the likelihood of default on the part of the borrower.
Terms related to DPD
DPD is a term that includes:
- STD:STD is short for standard payment. The payment must have been made within 90 calendar days of the due dates.
- DBTDBT stands for doubtful. The account has been substandard for at least one year.
- SUB:SUB refers to standard-subpayment. The term is used to describe payments made more than 90 calendar days after the original due date.
- LSS: LSS means loss. This is the term used to describe a situation where there is no hope of repayment from the borrower.
Why does DPD value matter?
To understand the role of DPD, the borrower must be familiar with full form in Banking. DPD displays the payment behaviour of the borrower. The DPD also displays the total amount of payments that the borrower has missed. DPD displays the number of days that the borrower has delayed the loan payment.
Conclusion
This is a brief blog about DPD and its full form as it appears in banking, and how this affects borrowers’ CIBIL scores. DPD is a way to determine the genuineness of the borrower in paying the loan. It shows the financial condition of the borrower.
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