Definition

Referring to loans or interest rates that are lower quality or higher risk, often given to borrowers with poor credit histories.

Example

Many banks offer subprime loans to individuals who may not qualify for traditional financing.

Conversation

I heard they are offering subprime loans to people with bad credit.

Really? That sounds risky for the lenders.

Yeah, but some people might not have any other options.

True, it's tough when you're trying to rebuild your finances.

Synonyms & Antonyms

Definition

A type of loan that is offered to borrowers with lower credit ratings, often at higher interest rates due to the increased risk of default.

Example

Many people were unable to qualify for a prime mortgage and had to settle for a subprime loan instead.

Conversation

Have you heard about the subprime loans that some people are getting?

Yeah, I've read that they can be risky for borrowers.

Right? It seems like a lot of people are unaware of the dangers of subprime lending.

Root Explanation

Subprime → It is formed from "sub-" (meaning below or under) and "prime" (from Latin "primus", meaning first or primary). The term "subprime" refers to loans that are below the standard or prime quality, indicating a higher risk of default.

Memory Tip

Think of 'sub-' meaning 'below' and 'prime' meaning 'first' — this helps you remember that 'subprime' refers to something that is below the standard or primary level.

Visually Confused Words