[lbo-talk] BBC's Sub-Prime Top Ten

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Tue Dec 11 11:57:45 PST 2007



> Can I ask a question on "sub-prime" ? Aren't the interest rates on
> such
> loans higher than the prime rate?

They are usually unrelated to the Prime Rate. Most of them are adjustable and they often start with 'teaser' rates as low as 1%. They quickly climb after some short amount of time and are often limited to something 12% or 14%.


> Aren't they super-prime interest rate loans

Heh. They (the borrower, vis their credit report) are 'sub-prime' in the way that the meat at Burger King isn't Prime. It's not the interest rate that's not prime.

/jordan



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