You searched for: “subprime
subprime (adjective) (not comparable)
A classification of borrowers with a tarnished or limited credit history: Lenders will use a credit scoring system to determine which loans a subprime borrower may qualify for.

Subprime loans usually carry more credit risks, and so, they result in higher interest rates.

Word Entries containing the term: “subprime
subprime loan (s) (noun), subprime loans (pl)
A loan offered to an individual who does not qualify for a normal loan at the "prime rate" because of his or her credit history: If a lender thinks that there is an above-average risk involved in giving a loan to a certain individual, chances are likely that the lender will offer the borrower a subprime loan, which has an interest rate "higher than the prime rate".

The subprime rate offered by a lender may be different depending on the lending institution.

subprime mortgage (s) (noun), subprime mortgages (pl)
A class of property that is used by borrowers who have low credit ratings: Borrowers who have subprime mortgages generally do not qualify for loans with lower rates because they have "damaged credit" or no credit history, and so they are considered untrustworthy by lending institutions.

Since the default risk for poor credit borrowers is greater than for other kinds of borrowers, lenders will normally charge a higher interest rate for subprime mortgages.

Word Entries at Get Words: “subprime
subprime
1. Having or being an interest rate that is higher than a prime rate and is extended especially to low-income borrowers.
2. Extending or obtaining a subprime loan.

A classification of borrowers with a tarnished or limited credit history. Lenders will use a credit scoring system to determine which loans a borrower may qualify for.

Subprime loans carry more credit risk, and as such, will carry higher interest rates as well.

Occasionally some borrowers might be classified as subprime despite having a good credit history because the borrowers have elected not to provide verification of income or any assets in the loan application process.

This entry is located in the following unit: New Words (page 2)