Sub-prime Borrower
Definition
- A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.
Synonyms
non-prime borrower, near-prime borrower, sub-prime lending
Related Terms and Acronyms
- Bad Credit — Definition,
- Someone who carries a higher credit risk.
- Bad Credit Loan — Definition,
- A loan taken out by someone with bad credit.
- Borrow — Definition,
- Sand, gravel or other material used for grading; a slope.
- To get a loan of money.
- Borrower — Definition,
- A person who borrows money or obtains a loan.
- Credit Rating (CR) — Acronym, Very Important,
- A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.
➥ A metric to measure the credit worthiness of a debtor. - Credit Report (CR) — Acronym, Very Important,
- A report on a loan applicant's willingness and ability to make payments in a timely manner in the past. This report is provided to the bank by an outside agency.
➥ A report that outlines the credit worthiness of an individual or entity. - Default — Definition,
- When a borrower fails to fulfill the obligations of a loan or lease.
- Delinquent Mortgage — Definition, Important,
- A mortgage loan where the borrower fails to make payments as specified in the loan agreement.
- Equifax (EF) — Company Est. 1899, Canada, Important,
- A major credit bureau company in Canada along with Trans Union.
- Experian (XP) — Company, Canada,
- One of the Big Three credit bureaus, along with Equifax and Trans Union, Experian not normally used in Canada.
- Guaranty — Definition,
- A promise to assume responsibility for a debt if the borrower defaults.
- Predatory Lending (PL) — Acronym, Important,
- Lending practices that are unfair, deceptive or fraudulent.
- Prime Lending Rate (PLR) — Acronym, Very Important,
- The rate of interest charged on loans by chartered banks to their most creditworthy customers.
➥ Bank of Canada's prime (best) lending rate. - Prime Rate — Definition,
- The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
- Sub-prime Mortgage — Definition, Important,
- A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
