Sub-Prime Lending

Also called ?B/C Paper,? ?near-prime,? or ?second chance? lending, is a general term
that refers to the practice of making loans to borrowers who do not qualify for market
interest rates because of problems with their credit history. A sub-prime loan is
one that is offered at a rate higher than A-paper loans due to the increased risk.
Sub-prime lending encompasses a variety of credit instruments, including sub-prime
mortgages, sub-prime car loans, and sub-prime credit cards, among others.

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