Meaning
A Subprime Loan is a lending product for individuals with lower credit scores or limited credit history.Definition
A **Subprime Loan** is credit extended to borrowers who may not qualify for conventional loans due to a higher perceived risk of default, based on their creditworthiness.Key Characteristics
These loans typically feature higher interest rates and less favorable terms compared to prime loans. They often have variable rates and higher fees.Risks and Implications
For borrowers, subprime loans carry a higher risk of default, potentially causing financial distress. For lenders, they present a higher risk of non-repayment, impacting financial stability.Author
