Broadly there are two types of lending : prime and sub prime. Prime lending is the lending made to people who have high credit score while sub prime lendings are for the people who have low credit score that is they might be delinquents or do not have good credit worthiness.
This kind of lending is a two way risky lending or should I say double risky .As the lender is not sure of getting the money back & from the borrowers point of view it is more risky than prime lending because the rate of interest charged is higher than that on prime lending( higher risk & higher return).
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