A sub-prime loan is a type of loan given to a borrower who has a weak credit history and who doesn’t qualify for a loan at the best rates. Other than a bad credit rating, a low income or inadequate assets also make it difficult for a borrower to secure a loan.
Sub-prime loans are usually attached to a higher rate of interest because of uncertainties related to the borrower. Not many lending institutions offer this type of loan. The ones that do have different terms and conditions.