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.