Loan performance refers to how well a loan is being repaid by the borrower. It is typically measured by factors such as on-time payments, delinquencies, and defaults. A loan is considered performing if the borrower is making regular payments as agreed, while a non-performing loan indicates that the borrower has missed payments or is in default. Lenders closely monitor loan performance to assess the risk associated with their lending portfolio. Good loan performance can lead to lower interest rates for borrowers and increased profitability for lenders. Conversely, poor loan performance can result in financial losses and stricter lending criteria in the future.