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In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. [1] Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied ...
Subprime lending was one of the main drivers of the financial crisis that fueled the Great Recession. In the years leading up to the economic meltdown, lenders approved many subprime mortgages ...
Subprime mortgage lending jumped dramatically during the 2004–2006 period preceding the crisis. [9]The immediate cause of the crisis was the bursting of the United States housing bubble which peaked in approximately 2006.
Subprime loans are loans to borrowers displaying one or more of these characteristics at the time of origination or purchase. Such loans have a higher risk of default than loans to prime borrowers." [ 1 ] If a borrower is delinquent in making timely mortgage payments to the loan servicer (a bank or other financial firm), the lender may take ...
Why subprime loans exist. Auto lenders establish loan rates based on borrower credit scores. Borrowers with poor credit tend to have an unfavorable payment history and high levels of revolving ...
Understanding what subprime auto loans are and exploring the risks and factors involved can help you learn how to finance a car with a lower credit score.