Subprime loans are risky loans granted to borrowers who are not ” prime risks “. These are credits that developed because they were high yield.
The term subprime has become associated with risky loans made in the US real estate market. but it also applies to risky loans granted on the English real estate market The crisis in the subprime mortgage sector in England followed by a few months that on the American real estate market.
The subprime loan is to real estate credit to individuals what the junk bond is to credit to businesses. They are “bad loans”, now called “toxic loans”, while “junk bonds” are “bad bonds”. In both cases, these are excessive credits given the borrower’s repayment possibilities, putting him in a situation of over-indebtedness.