BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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those borrowers who do not have a good credit history
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those who wish to take loan against the mortgage of tangible assets
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those who have a good credit history and are known to bank since 10 years
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those borrowers who are most preferred customers of the bank
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Detailed explanation-1: -A subprime loan is a loan offered to individuals at an interest rate above prime, who do not qualify for conventional loans. Such individuals have low income, limited credit history, poor quality collateral, or poor credit.
Detailed explanation-2: -Subprime lending is the practice of lending to borrowers with low credit ratings. Because these borrowers carry relatively high default risks, subprime loans carry above-average interest rates.
Detailed explanation-3: -Subprime refers to borrowers or loans, usually offered at rates well above the prime rate, that have poor credit ratings. Subprime lending is higher risk, given the lower credit rating of borrowers, and has in the past contributed to financial crises.