Subprime loan market losing its appeal for lenders
Subprime loans give money to borrowers with less-than-stellar credit ratings. In return, lenders collect higher interest. But the shine is off lending to riskier borrowers these days. There’s word this week that Uber is selling off its subprime car-leasing division. That’s according to the Wall Street Journal, although Uber would not comment. The company originally offered such leases in an effort to get more drivers, and it looks like the move may not be paying off. But it isn’t just Uber that’s having trouble with sub-prime lending. Defaults are rising in the auto industry. And even banks that lend money for a variety of loans are moving away from the subprime market and focusing on more affluent customers.
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