Meaning & use
non-prime loan
Last updated
Meaning
nouncountablefinancebusiness
A loan given to a borrower with a weak credit history, usually at a higher interest rate.
Grammar: Countable: you can say 'a non-prime loan' or 'non-prime loans'.
Patterns
- take out a non-prime loan
- a non-prime loan at a higher rate
Because his credit score was low, he could only get a non-prime loan with a high interest rate.
The bank offers non-prime loans to customers who have missed payments in the past.
Non-prime loans are riskier for lenders, so they often charge more.
Word forms
| plural | non-prime loans |
|---|
Common combinations
- non-prime borrower
- Non-prime borrowers often pay higher fees.
- non-prime mortgage
- They took out a non-prime mortgage to buy the house.
- non-prime lending
- Non-prime lending increased before the financial crisis.
- non-prime rate
- The non-prime rate is several points above the prime rate.
Synonyms and how they differ
- subprime loan
- The more common American term for the same idea; 'non-prime' is often used in British and international finance.
- high-risk loan
- Focuses on the danger to the lender rather than the borrower's credit status.
Opposites
Word family
- non-prime adjective
- Describing a borrower or loan that does not meet prime lending standards.
- subprime adjective
- American equivalent meaning below prime quality.
Commonly confused: non-prime loan or prime loan?
non-prime loan vs prime loan
A prime loan is for borrowers with excellent credit and low risk; a non-prime loan is the opposite.
Practice
Which sentence uses 'non-prime loan' correctly?
Choose one answer.
A non-prime loan is for borrowers with weaker credit, so it usually has a higher rate. Option An and C describe prime loans, and D is false.
Make it your own
Write a sentence using “non-prime loan”, then check it and compare it with the examples above.