Sub-prime loans refer to those loans granted to borrowers with poor credit quality and low income. Due to bad or insufficient credit, these people are often not eligible for preferential loans that require borrowers to have a good credit record. Lenders are willing to provide loans to these people because the interest rate of subprime loans is usually much higher than that of high-quality loans and the return is higher. This kind of loan usually does not require a down payment, but the interest will continue to increase.

These loans are usually issued by venture capital banks, because the lenders are all low-income groups, so their repayment ability is weak, which is easy to cause bad debts. Is the fuse of this financial crisis.