Subprime
Subprime is like when you ask your mom or dad for money to buy a toy, but they say no because you haven't been doing your chores and you owe them money already.
In the grown-up world, subprime is when people ask banks or other companies for loans, but the banks say no because those people have a history of not paying back their debts. This means they have a lower credit score, which is like a grade for how responsible they are with money.
Companies or banks might still give subprime loans, but they charge those people more money in interest and fees because they are taking a bigger risk of not getting their money back. This can make it even harder for people to pay back their loans and can lead to some big problems, like the housing crisis in the late 2000s.
In the grown-up world, subprime is when people ask banks or other companies for loans, but the banks say no because those people have a history of not paying back their debts. This means they have a lower credit score, which is like a grade for how responsible they are with money.
Companies or banks might still give subprime loans, but they charge those people more money in interest and fees because they are taking a bigger risk of not getting their money back. This can make it even harder for people to pay back their loans and can lead to some big problems, like the housing crisis in the late 2000s.
Related topics others have asked about: