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Reference.org
Subprime lending
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<p>In <a href="/facts/Finance/fLh1GgN8">finance</a>, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of <a href="/facts/Loan/bPaAc9HT">loans</a> to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having <a href="/facts/FICO_score/zsV3EwIn">FICO scores</a> below 600, although this threshold has varied over time. </p><p>These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk. During the early to mid-2000s, many subprime loans were packaged into <a href="/facts/Mortgage-backed_securities/KaG3e9vX">mortgage-backed securities</a> (MBS) and ultimately <a href="/facts/Default_(finance)/tzRGlN51">defaulted</a>, contributing to the <a href="/facts/Financial_crisis_of_2007%25E2%2580%25932008/qw8n1pSN">financial crisis of 2007–2008</a>. </p>