subprime
UK: ˈsʌb.praɪm | US: ˈsʌb.praɪm
adj. relating to or denoting a loan, typically a mortgage, offered to borrowers with a poor credit history.
n. a subprime loan or borrower.
The word "subprime" combines the prefix "sub-" (from Latin sub, meaning "under" or "below") with "prime" (from Latin primus, meaning "first" or "best"). In finance, "prime" refers to high-quality borrowers, so "subprime" logically denotes borrowers or loans of lower quality. The term gained prominence in the early 2000s during the U.S. housing bubble, where risky lending practices targeted "subprime" borrowers, ultimately contributing to the 2008 financial crisis.
Many subprime mortgages defaulted during the housing market crash.
Banks tightened lending standards after the subprime crisis.
Subprime borrowers often face higher interest rates due to their credit risk.
The rise in subprime auto loans has raised concerns among economists.
Regulatory reforms aimed to prevent another subprime lending disaster.