Prime Rate

What does it Mean? The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank's best customers consist of large corporations.
Investopedia Says... Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank's best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be charged to a customer who has a higher likelihood of defaulting on a loan.

Terms Related Links

Bank Rate
Cap
Central Bank
Discount Rate
Federal Reserve Bank
Interest Rate
Points
Prime
Subprime Loan

Terms Related Links
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