Subprime Lender Definition

A subprime lender is any lender that specializes in making subprime loans to borrowers with tarnished credit histories. Subprime lenders accept a greatly increased risk of losing their investment in exchange for a greatly inflated interest return on their investment.

Subprime lenders use a variety of techniques to promote their products and secure borrowers, and are frequently accused of using predatory lending practices. Most subprime lenders focus on short-term loans, high interest rates, and aggressive collection techniques.