Subprime Personal Loans Defined and Explained
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What Are Subprime Loans?
Poor credit Low income Zero or limited credit history Less than ideal collateral
They provide borrowers access to needed funds. They help borrowers who have no credit or poor credit the opportunity to build a stronger credit history with financial institutions.
What Is a Subprime Credit Score?
Can Subprime Loans Impact Your Credit Score?
How Do Subprime Loans Work?
4 Types of Subprime Loans
1. Interest-Only Subprime Loans
2. Fixed-Rate Subprime Loan
3. Adjustable-Rate Subprime Loan
4. Dignity Subprime Loan
Pros and Cons of Subprime Loans
Getting a Subprime Loan
Government-issued ID Tax returns Pay stubs Social Security number Employer name Start date of current job Amount of recurring debts
Repayment period Type of interest (fixed or variable) Interest amount Penalties Origination fee Secured or unsecured Monthly payment amount
Subprime Loans vs Regular Loans
Similarities
Differences
Alternatives to Subprime Personal Loans
Getting a Cosigner
Borrowing From Friends and Family
Selling Assets
Pay by Cash
Home Equity Loan
Compare Personal Loan Lenders
Frequently Asked Questions
Photo credit: iStock/Sezeryadigar
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About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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