What is sub-prime lending?

Question

What is sub-prime lending?

Answer 1

High-risk loans.

Answer 2

Basically its a high risk loan.  The types of borrowers that would fall into the category include:

those with credit scores less than 620; someone who has filed for bankruptcy in the last 7 years, someone that has several outstanding payments

Sub prime loans are more risky to the bank but obviously have a higher return, with a rate that is always higher than the prime rate.