• Loan impairment occurs when there has been a deterioration in the creditworthiness of an individual or entity.
  • Borrowers with impaired credit history will generally have less access to lines of credit and will have to pay higher interest rates on loans.
  • Credit impairment may require drastic changes in operations or procedures to alleviate financial stress - whether it be paying off debts such as credit card debt or a company cutting costs and selling assets.