May 10, 2026

Can I Get A Subprime Personal Loan With A 580 Credit Score: Borrower’s Guide (2025)

Obtaining a subprime personal loan with a 580 credit score is possible but comes with specific challenges and considerations. Lenders often view this credit score as a sign of higher risk, which can lead to elevated interest rates and less favorable terms. Understanding the eligibility requirements, potential risks, and implications of your credit score is crucial to making an informed decision about borrowing.

Can I get a subprime personal loan with a 580 credit score?

Yes, you can get a subprime personal loan with a 580 credit score, though options may be limited and terms less favorable. Lenders categorize individuals with credit scores between 580 and 669 as subprime, indicating a higher risk of default. You can also review our loan calculators for related guidance.

Understanding subprime loans

Subprime loans are designed for borrowers with lower credit scores who may not qualify for traditional financing. These loans generally come with higher interest rates to compensate lenders for the increased risk. Borrowers should carefully assess their financial situation and repayment ability before proceeding with a subprime loan. You can also review our compare loans for related guidance.

What does a 580 credit score mean?

A credit score of 580 is considered below average and falls within the subprime range. It indicates a history of missed payments, high credit utilization, or other negative factors affecting creditworthiness. Lenders may view this score as a signal of potential repayment issues, impacting loan approval and terms. You can also review our mortgage options for related guidance.

Why is credit score important for loans?

Your credit score serves as a summary of your creditworthiness, influencing the likelihood of loan approval and the interest rates offered. Lenders use this score to assess risk; a higher score typically leads to better terms and lower rates, while a lower score can result in higher costs and stricter conditions. For official educational guidance, review Consumer Financial Protection Bureau.

What are the eligibility requirements for subprime personal loans?

Eligibility for subprime personal loans varies by lender but generally includes minimum credit score thresholds, proof of income, and an acceptable debt-to-income ratio. Each lender may have unique criteria, so it’s essential to compare multiple options before applying. For official educational guidance, review official U.S. loan guidance.

Minimum credit score needed

Most lenders require a minimum credit score of around 580 for subprime personal loans, although some may consider lower scores. However, a score in this range usually results in higher interest rates and less favorable terms, making it crucial to understand your options.

Income requirements

Lenders typically need to verify your income to ensure you can repay the loan. This may involve providing pay stubs, tax returns, or other documentation. Consistent income and a stable employment history can improve your chances of loan approval, even with a lower credit score.

Debt-to-income ratio considerations

Your debt-to-income (DTI) ratio is a crucial factor in loan eligibility. A lower DTI indicates that you manage your debts well, which can positively influence a lender’s decision. Most lenders prefer a DTI below 40%, but some may accommodate higher ratios for subprime borrowers.

What types of lenders offer subprime personal loans?

Subprime personal loans are offered by various lenders, including traditional banks, credit unions, and online lenders. Each has different policies, interest rates, and terms, making it essential to evaluate the advantages and disadvantages of each type.

Traditional banks

Many traditional banks offer subprime loans, but their strict lending criteria can make approval difficult. While they may offer competitive interest rates, their focus on credit scores can limit access for borrowers with lower credit ratings. Always inquire about specific programs tailored for subprime borrowers.

Credit unions

Credit unions often provide more flexible lending options and may be more willing to work with borrowers with lower credit scores. They typically have a community-focused approach, which can lead to more personalized service and potentially lower fees. However, membership requirements may apply.

Online lenders

Online lenders have become an increasingly popular option for subprime loans, offering quicker approval processes and more lenient criteria. They often provide a broader range of products, but borrowers should be cautious about fees and terms, as they can vary significantly between platforms.

What are the risks associated with subprime personal loans?

Subprime personal loans carry several risks, including higher interest rates, the potential for a debt cycle, and negative impacts on your credit score. Understanding these risks is essential for making responsible borrowing decisions and ensuring long-term financial health.

Higher interest rates

Subprime loans typically come with significantly higher interest rates than prime loans. This increase in cost reflects the lender’s perception of risk. Borrowers should calculate the total cost of the loan, including interest and fees, to assess affordability and the impact on their financial situation.

Potential for debt cycle

Subprime loans can lead to a cycle of debt if borrowers take out additional loans to cover existing debts. High-interest payments can strain monthly budgets, making it challenging to meet obligations. It’s crucial to create a realistic repayment plan and avoid accumulating further debt.

Impact on credit score

Missing payments or defaulting on a subprime loan can severely damage your credit score, making future borrowing more difficult and expensive. Maintaining timely payments is essential for protecting your credit health and improving your score over time.

What is the average APR for subprime personal loans?

The average Annual Percentage Rate (APR) for subprime personal loans typically ranges from 25% to 36%, depending on the lender and borrower’s profile. Understanding how APR affects overall loan costs is critical when comparing loan options.

Comparative APR ranges

Subprime loans generally exhibit higher APRs compared to prime loans, which can range from 6% to 24%. These elevated rates reflect the increased risk associated with lending to borrowers with lower credit scores. Always evaluate APR alongside any associated fees to gauge the total cost of the loan.

Factors affecting APR

Several factors influence the APR offered to subprime borrowers, including credit score, income, loan amount, and repayment term. Lenders may also consider the borrower’s financial history, including previous defaults or late payments, which can affect the interest rate offered.

How APR affects repayment

A higher APR means more expensive monthly payments and a greater total repayment amount. Borrowers should calculate the long-term financial impact of the APR, including how it will affect their budget and ability to pay off the loan within the desired timeline.

What fees are commonly associated with subprime personal loans?

Subprime personal loans often come with various fees that can increase the overall cost of borrowing. Understanding these fees is essential for evaluating loan options and ensuring you’re prepared for the total financial commitment.

Origination fees

Many lenders charge origination fees, which cover the costs of processing the loan. These fees can range from 1% to 5% of the loan amount. Borrowers should inquire about these fees upfront, as they can significantly affect the total amount received and the overall cost of the loan.

Prepayment penalties

Some subprime loans include prepayment penalties, which charge borrowers for paying off the loan early. This can deter borrowers from refinancing or paying off debts sooner, making it essential to understand the terms before signing. Always ask lenders if prepayment penalties apply.

Late payment fees

Late payments on subprime loans can also incur substantial fees, further exacerbating financial strain. These fees vary by lender but can significantly increase the total amount owed. Timely payments are crucial to avoid these penalties and protect your credit score.

How does a 580 credit score impact loan terms?

A 580 credit score typically results in less favorable loan terms, including higher interest rates, lower loan amounts, and shorter repayment periods. Understanding these terms is vital for making informed borrowing decisions and ensuring you can manage repayment effectively.

Interest rates offered

Borrowers with a 580 credit score can expect interest rates significantly higher than those with prime credit scores. While prime borrowers might secure rates as low as 6%, subprime borrowers may face rates starting at 25%, reflecting the increased risk taken on by lenders.

Loan amounts

With a 580 credit score, lenders may limit the loan amount offered to mitigate risk. Borrowers might find it challenging to secure larger loans, which can restrict their ability to cover significant expenses. Before applying, assess your financial needs and explore various lenders for the best options.

Repayment periods

Repayment periods for subprime personal loans are often shorter, which can lead to higher monthly payments. Borrowers should consider their budget and ability to meet these payments when evaluating loan options. Extended repayment terms can sometimes be negotiated, so it’s wise to ask potential lenders.

How can I improve my credit score before applying?

Improving your credit score before applying for a subprime personal loan can enhance your chances of securing better terms. Simple steps can lead to significant improvements over time, making your financial options more favorable.

Paying down debts

Reducing outstanding debts is one of the most effective ways to improve your credit score. Focus on paying down high-interest credit cards and loans, as this will decrease your credit utilization ratio and enhance your overall credit profile. Consider using the snowball or avalanche method for debt repayment.

Correcting errors

Review your credit report for inaccuracies that could be negatively impacting your score. Disputing errors can lead to score improvements. Regularly checking your report through authorized agencies ensures you’re aware of your credit status and can take corrective action as needed.

Building a positive payment history

Establishing a positive payment history is crucial for improving your credit score. Ensure that you make all payments on time, as late or missed payments can significantly harm your creditworthiness. Consider setting up automatic payments or reminders to stay on track.

Should I consider a co-signer for a subprime loan?

Having a co-signer can improve your chances of loan approval and may lead to more favorable terms. However, this decision carries responsibilities and risks for both parties, making it essential to weigh the pros and cons carefully.

Benefits of having a co-signer

A co-signer with a stronger credit profile can enhance your loan application, increasing the likelihood of approval and potentially lowering your interest rate. Their creditworthiness provides reassurance to lenders, making it easier for borrowers with lower scores to obtain financing.

Risks for the co-signer

Co-signing carries risks for the co-signer, as they are responsible for the loan if you default. This obligation can impact their credit score and financial standing. It’s crucial for both parties to communicate openly about repayment responsibilities and financial capabilities.

Eligibility requirements for co-signers

Co-signers typically need to meet certain criteria, including a higher credit score and stable income. Lenders may require documentation of the co-signer’s financial situation, so it’s essential to choose someone who understands the risks involved in co-signing a loan.

What is the repayment process for subprime personal loans?

The repayment process for subprime personal loans involves regular monthly payments, typically over a set term. Understanding this process is crucial for managing your budget and ensuring timely payments.

Monthly payment structure

Most subprime personal loans require fixed monthly payments, which include both principal and interest. The exact amount will depend on the loan amount, interest rate, and term length. Borrowers should budget accordingly to ensure they can meet their repayment obligations without financial strain.

Early repayment options

Some lenders allow early repayment of loans without penalties, which can save borrowers money on interest. It’s essential to review your loan agreement to understand any conditions surrounding early payments and whether prepayment penalties apply.

Consequences of missed payments

Missing payments can lead to late fees, increased interest rates, and negative impacts on your credit score. Persistent late payments may result in default, which can have severe financial consequences, including legal action from lenders. Setting up reminders or automatic payments can help avoid these issues.

What borrower protections exist for subprime loans?

Borrowers of subprime loans are protected by various consumer financial protection laws that ensure transparent lending practices. Understanding these protections is essential for navigating the borrowing process responsibly.

Consumer financial protection laws

Consumer financial protection laws, such as the Truth in Lending Act, require lenders to disclose loan terms, including APR, fees, and repayment schedules. These regulations help borrowers make informed decisions and ensure fair lending practices.

Disclosure requirements

Lenders are obligated to provide clear and comprehensive information about loan terms and conditions. This includes details on fees, interest rates, and the total cost of the loan. Borrowers should carefully review all disclosures before signing any agreements to avoid unexpected costs.

Rights during repayment

Borrowers have rights during the repayment process, including the right to request changes to payment plans or to dispute incorrect billing statements. Understanding these rights can empower borrowers to stand up against unfair practices and seek solutions when issues arise.

How do I compare subprime loan offers?

Comparing subprime loan offers involves evaluating various factors such as APR, fees, and loan terms. Careful comparison can help you find the best option for your financial situation.

Evaluating APR and fees

When comparing loan offers, pay close attention to both the APR and any associated fees. A lower APR may be offset by higher fees, so consider the total cost of the loan when making your decision. Use an online calculator to estimate monthly payments based on different scenarios.

Understanding loan terms

Loan terms, including repayment periods and conditions for early repayment, should also be considered. Longer repayment terms can lower monthly payments but may increase the total interest paid over time. Ensure you understand the implications of each term before committing.

Assessing lender reputation

Researching lender reputation is crucial when comparing loan offers. Look for reviews and ratings from previous borrowers to gauge customer satisfaction and service quality. A reputable lender should provide clear communication and support throughout the loan process.

What alternatives are there to subprime personal loans?

Several alternatives to subprime personal loans may offer better terms or lower costs. Exploring these options can help you find financing that better suits your needs.

Secured loans

Secured loans require collateral, such as a vehicle or savings account, which can reduce lender risk and potentially lead to lower interest rates. However, borrowers should be cautious, as failure to repay can result in the loss of the collateral. Assess the risks and benefits before proceeding with a secured loan.

Peer-to-peer lending

Peer-to-peer lending platforms connect borrowers directly with individual investors willing to fund loans. This option can offer more competitive rates than traditional lenders, but it may still involve higher costs than prime loans. Review terms carefully and assess the platform’s reputation before borrowing.

Credit repair options

Improving your credit score through credit repair may open up more favorable borrowing options. Working with a professional credit repair service can help identify issues and create a plan to enhance your creditworthiness over time. This strategic approach may lead to better loan terms in the future.

How can I avoid scams when seeking subprime loans?

Protecting yourself from scams while seeking subprime loans is vital. Awareness and diligence can help you identify potential red flags and make safer borrowing choices.

Identifying red flags

Be cautious of lenders that promise guaranteed approval, charge upfront fees, or pressure you to sign contracts quickly. Legitimate lenders should provide clear information and allow you time to review terms. Take your time and trust your instincts if something feels off.

Verifying lender legitimacy

Research lenders thoroughly before applying for a loan. Check for reviews, ratings, and any complaints lodged with consumer protection agencies. Ensuring that a lender is licensed and regulated can provide peace of mind and protect you from fraudulent practices.

Understanding loan agreements

Always read and understand the loan agreement before signing. Look for hidden fees, unclear terms, or unfavorable conditions. If you have questions or concerns, don’t hesitate to ask the lender for clarification or seek professional advice before proceeding.

Is it possible to refinance a subprime loan later?

Refinancing a subprime loan is possible and can be a smart financial move if done correctly. However, borrowers should consider their financial situation and market conditions before pursuing this option.

When to consider refinancing

Consider refinancing when you have improved your credit score, allowing you to qualify for better rates. Additionally, if interest rates in the market decrease, refinancing could provide significant savings. Assess your current loan terms and market conditions to determine if refinancing makes sense.

Benefits of refinancing

Refinancing can lower your interest rate, reduce monthly payments, or extend repayment terms. It can also allow you to consolidate debt or access equity in your home, depending on the type of loan. However, weigh the costs of refinancing against potential savings.

Potential challenges in refinancing

Challenges in refinancing may include fees associated with the new loan, potential credit score impacts, or limited options if your financial situation hasn’t improved. Ensure that you have a solid plan and understand the costs involved before proceeding with refinancing.

How do subprime loans impact long-term financial health?

Subprime loans can significantly impact long-term financial health, affecting credit scores, debt levels, and overall financial stability. Understanding these consequences is essential for responsible borrowing and future planning.

Effects on credit score

Successfully managing a subprime loan can lead to credit score improvements over time, while missed payments can cause lasting damage. Establishing a positive repayment history is crucial for enhancing your creditworthiness and improving future borrowing options.

Debt burden

Subprime loans can contribute to a higher debt burden, especially if borrowers take on additional loans to cover expenses. This can make financial management challenging and lead to increased stress. It’s essential to budget carefully and avoid accumulating unnecessary debt.

Financial planning considerations

Long-term financial planning is vital for borrowers with subprime loans. Create a strategy to pay off existing debts, improve your credit score, and avoid future reliance on high-cost loans. Seeking guidance from financial advisors can help you navigate these challenges effectively.

What documentation is needed to apply for a subprime loan?

To apply for a subprime loan, you will typically need to provide various documents to verify your identity, income, and creditworthiness. Gathering these documents ahead of time can streamline the application process.

Proof of income

Lenders usually require proof of income, which may include recent pay stubs, tax returns, or bank statements. This documentation helps verify your ability to repay the loan. Ensure that your income documentation is accurate and reflects your current financial situation.

Credit history report

While lenders will typically pull your credit history, it can be beneficial to review your report beforehand. Understanding your credit history allows you to address any issues that might affect your loan application. You can obtain a free report from major credit reporting agencies annually.

Identification requirements

Lenders will require valid identification to process your application. This may include a government-issued ID or Social Security number. Ensure that all identification documents are current and accurately represent your identity to avoid delays in the application process.

How quickly can I get approved for a subprime personal loan?

Approval timelines for subprime personal loans can vary, but many lenders provide quick decisions, often within 24 to 48 hours. However, several factors can impact the speed of approval, including documentation completeness and lender processing times.

Typical approval timelines

Many online lenders offer expedited approval processes, sometimes providing same-day decisions. Traditional banks and credit unions may take longer due to more stringent verification processes. Be prepared to provide all necessary documentation promptly to facilitate quicker approval.

Factors affecting approval speed

Approval speed can be affected by your credit profile, the lender’s requirements, and the completeness of your application. Missing documents or discrepancies in your application can cause delays. Ensure that all information is accurate and complete to improve your chances of a swift decision.

Same-day funding options

Some lenders offer same-day funding for approved applicants, allowing you to access funds quickly. However, this option may come with higher costs or stricter terms. Always assess the total cost of borrowing before opting for expedited funding.

What should I ask potential lenders during the application process?

Asking the right questions during the application process can help ensure you understand the loan terms and make informed decisions. Prepare a list of inquiries to clarify fee structures, repayment terms, and lender practices.

Questions about fees

Inquire about all fees associated with the loan, including origination fees, late payment penalties, and any prepayment penalties. Understanding the full cost of the loan helps you make better decisions and avoid unexpected expenses. Be sure to get this information in writing.

Clarification on terms

Ask for clarification on loan terms, including the repayment schedule, interest rate adjustments, and any options for deferment or forbearance. Clear communication about these terms can prevent misunderstandings and financial strain throughout the repayment period.

Inquiries about customer service

Evaluate the lender’s customer service reputation by asking about their support channels and availability. Understanding how easily you can reach them for assistance during the loan term is essential for a positive borrowing experience. Look for lenders that are responsive and provide comprehensive support.

Are there specific lenders known for working with low-credit borrowers?

Several lenders specialize in providing personal loans for low-credit borrowers, often offering tailored options to meet their needs. Researching these lenders can help you find more favorable terms and conditions.

Top subprime lenders

Some well-known lenders, like Avant, OneMain Financial, and Upstart, focus on subprime borrowers and may offer competitive terms. Each lender has unique offerings, so it’s important to compare rates, fees, and customer reviews before choosing.

Comparing lender offerings

When comparing lenders, look at interest rates, fees, repayment terms, and borrower reviews. This comparison can help you identify which lenders are more favorable for your credit profile and financial situation. A thorough analysis ensures you choose the best option available.

Lender reviews and ratings

Checking lender reviews and ratings through consumer review platforms can provide insights into borrower experiences. Look for patterns in customer feedback related to service quality, hidden fees, and overall satisfaction. This information can guide your choice and help you avoid potential pitfalls.

What are the consequences of defaulting on a subprime personal loan?

Defaulting on a subprime personal loan can lead to severe financial consequences, including significant credit score damage and potential legal actions from lenders. Understanding these risks is critical for responsible borrowing and managing your financial health.

Impact on credit score

Defaulting on a loan can cause severe damage to your credit score, potentially dropping it significantly. This negative impact can hinder your ability to secure future loans, leading to higher costs and limited options. Maintaining timely payments is crucial to protect your creditworthiness.

Legal actions from lenders

In the event of default, lenders may initiate legal actions to recover owed amounts. This could result in wage garnishments or liens against your assets. Understanding the seriousness of default is crucial for making informed borrowing decisions.

Alternative debt relief options

If you find yourself struggling with loan repayment, consider exploring alternative debt relief options, such as debt consolidation or working with credit counseling services. These strategies can help manage your debt and provide a path toward financial recovery, minimizing the impact of default.

Can I negotiate loan terms with lenders?

Negotiating loan terms with lenders is possible, especially if you have a good understanding of your financial situation and market conditions. Being prepared and informed can lead to more favorable loan agreements.

Strategies for negotiation

Research similar loan offers to leverage in negotiations. Approach lenders with a clear understanding of your financial situation and express your willingness to work together toward mutually beneficial terms. Being polite yet firm can help establish a positive negotiating atmosphere.

What terms are negotiable?

Many loan terms can be negotiable, including interest rates, repayment periods, and fees. Understanding which terms matter most to you can help focus negotiations. Be open to compromise but ensure that any agreed-upon terms align with your financial goals.

When to walk away from an offer

If negotiations do not yield favorable terms or if a lender is unwilling to address your concerns, it may be wise to walk away. Avoiding a loan that presents unfavorable conditions can protect your financial health in the long run. Always prioritize your ability to repay the loan comfortably.

What role does income play in securing a subprime loan?

Income plays a critical role in securing a subprime loan, as lenders assess your ability to repay the loan based on your earnings. Understanding how income affects the approval process can help you prepare effectively.

Income stability vs. amount

Both the stability and amount of your income are important for lenders. A steady income source reassures lenders of your ability to make timely payments. Providing evidence of consistent employment or income can enhance your application and increase your chances of approval.

How income affects loan approval

Lenders will evaluate your income during the approval process, looking for a sufficient amount to cover the loan payments alongside other financial obligations. A higher income can improve your chances of approval and may lead to better loan terms. Always present accurate income documentation during the application.

Documentation of income

Accurate documentation of your income is essential to support your loan application. This may include pay stubs, tax returns, and bank statements. Being prepared with comprehensive income documentation can streamline the application process and enhance your credibility with lenders.

Is it wise to take a subprime personal loan for debt consolidation?

Using a subprime personal loan for debt consolidation can be beneficial, but it carries risks and considerations. Evaluating your financial situation and the terms of the loan is essential before proceeding.

Pros and cons of consolidation

Consolidating debt with a subprime loan can simplify payments and potentially lower interest rates. However, it may also result in higher overall costs if the APR is significantly higher than your current debts. Carefully weigh the pros and cons to ensure this strategy aligns with your financial goals.

Alternatives to subprime loans

Consider alternatives to subprime personal loans for debt consolidation, such as balance transfer credit cards or secured loans, which may offer better terms. Exploring various options can help you find a solution that minimizes costs and supports your financial health.

Long-term strategies for debt management

Developing a long-term debt management strategy is crucial for successfully navigating financial challenges. This may involve budgeting, increasing income, and working with financial advisors to create a plan for sustainable debt repayment. Prioritizing responsible financial practices can lead to long-term stability.

How does loan usage impact my credit score?

How you use a loan can significantly affect your credit score, influencing both short-term and long-term financial health. Understanding this relationship is essential for responsible borrowing and credit management.

Understanding credit utilization

Credit utilization refers to the ratio of your total credit card balances to your total credit limits. High utilization can lower your credit score, so maintaining low balances relative to your limits is crucial. Responsible loan usage can help improve your credit profile over time.

Short-term vs. long-term impacts

Taking out a loan can have both short-term and long-term impacts on your credit score. While a new loan may temporarily lower your score, consistent payments can enhance your credit standing over time. Monitor your credit regularly to understand these dynamics.

Best practices for loan usage

Best practices for loan usage include making timely payments, keeping balances low relative to limits, and avoiding excessive borrowing. Establishing a sound financial plan and sticking to it can ensure that loan usage positively impacts your credit score.

Can I still qualify for a subprime loan with a recent bankruptcy?

Qualifying for a subprime loan after a recent bankruptcy is possible but may be challenging. Understanding the impact of bankruptcy on your credit score and the waiting periods involved is essential for navigating this process.

Impact of bankruptcy on credit score

Bankruptcy significantly affects your credit score, often resulting in a substantial drop. This negative mark can remain on your credit report for up to ten years, making it crucial to focus on rebuilding your credit after bankruptcy to improve loan eligibility.

Waiting periods for loan applications

Many lenders require a waiting period after bankruptcy before considering loan applications, typically ranging from one to two years. This period allows borrowers time to rebuild their financial standing and establish a positive payment history before seeking new credit.

Options for post-bankruptcy borrowers

Post-bankruptcy borrowers may consider options like secured credit cards or credit-builder loans to rebuild credit. These tools can help demonstrate responsible credit usage and improve credit scores over time. When ready, borrowers can explore subprime loans with better terms.

What is a subprime personal loan?

A subprime personal loan is a type of loan offered to borrowers with lower credit scores, typically ranging from 580 to 669. These loans often come with higher interest rates and less favorable terms.

How can I find reputable lenders for subprime loans?

Research online reviews, check with consumer protection agencies, and compare offerings from multiple lenders. Look for transparency in terms, fees, and customer support to identify reputable lenders.

What should I do if I can’t make my loan payments?

If you’re struggling to make payments, contact your lender immediately to discuss options. They may offer deferment, forbearance, or alternative repayment plans to help you through financial difficulties.

How can I improve my chances of loan approval?

To improve your chances of loan approval, work on improving your credit score, reduce existing debt, and ensure you have a stable income. Having a co-signer may also enhance your application.

What are the consequences of defaulting on a loan?

Defaulting on a loan can lead to severe credit score damage, legal action from lenders, and increased financial stress. It’s crucial to communicate with lenders and explore options if you’re unable to make payments.

Can I negotiate the terms of my loan?

Yes, you can negotiate terms such as interest rates, fees, and repayment periods. Be prepared with information about competing offers and have a clear understanding of your financial needs.

Are there alternatives to subprime loans?

Yes, alternatives include secured loans, peer-to-peer lending, and credit repair options. Exploring these alternatives can help you find better terms and lower costs compared to traditional subprime loans.