Subprime lending is risky for both lenders and borrowers due to the combination of high interest rates, allegedly poor credit histories (histories which can be extraordinarily inaccurate) and potentially adverse financial situations that are sometimes associated with subprime applicants. A subprime loan is offered at a rate higher than A-paper loans due to the perceived increased risk. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards. The most abusive subprime lending practices are, arguably, short-term “payday” loans.As the result of an ongoing lending and credit crisis in the subprime industry, and in the greater financial markets which began in the United States, the controversy surrounding subprime lending has expanded. This phenomenon has been described as a financial contagion which has led to a restriction on the availability of credit in world financial markets.Millions of borrowers are making inflated payments and cutting back on other parts of their budget. Hundreds of thousands of borrowers have been forced to default or file for bankruptcy.Hundreds of subprime lenders or brokers have closed, some have filed for bankruptcy and several have been acquired