What type of loan typically targets higher-risk borrowers?

Subprime loans are specifically designed for borrowers who present a higher risk to lenders, often due to poor credit histories, low credit scores, or other financial factors that make them less likely to qualify for traditional financing options. These loans typically come with higher interest rates to offset the increased risk that lenders take on when lending to these borrowers.

In contrast, conventional loans are more suited for borrowers with good credit; fixed-rate loans refer to the loan structure rather than the borrower’s risk profile, and secured loans involve collateral, which can reduce the lender's risk but does not specifically target higher-risk borrowers. Thus, subprime loans directly address the needs of higher-risk individuals, making this the correct choice.