what is the difference between a prime loan and a subprime loan 
because subprime borrowers are riskier they carry higher interest rates than prime loans the specific amount of interest charged on a subprime loan is not set in stone different lenders may not evaluate a borrower s risk in the same manner this means a subprime loan borrower has an opportunity to save some money by shopping around still by definition all subprime loan rates are higher than the prime rate who offers subprime mortgages while any financial institution could offer a loan with subprime rates there are lenders that focus on subprime loans with high rates arguably these lenders give borrowers who have trouble getting low interest rates the ability to access capital to invest grow their businesses or buy homes at the same time the higher interest rates on subprime loans can translate into tens of thousands of dollars in additional interest payments over the life of a loan 