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The teaser loans are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.

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Q: Why is the offering of teaser loans by commercial banks a cause of economic concern?
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What is teaser?

a teaser loan is an adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.


What is teaser loans?

a teaser loan is an adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.


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