Question

'Sub Prime Lending' is a term applied to the loans made to ____________.

• A. those borrowers who do not have a good credit history.
• B. those who wish to take loan against the mortgage of tangible assets.
• C. those who have a good credit history and are known to bank since 10 years.
• D. those borrowers who are most preferred customers of the banks

Answer 1

The correct option is A those borrowers who do not have a good credit history.

The term sub-prime ending became known widely after the 2008/09 Global economic crisis. The term basically describes those loans given by banks to individuals who might not be able to pay back the entire loan or would not pay the loan back as per the repayment schedule.
This kind of lending is strictly prohibited as it in a large sum it can fracture the entire economic system.