Prime Rate

What does it mean?

The prime rate is the interest rate at which banks lend to customers or businesses with the highest credit rating or simply the most creditworthy customers.

Points to remember

  • It is used on many short-term loan products which include adjustable mortgage rates, automobile loans, credit cards, and home equity loans.
  • The prime rate index can fluctuate or remain constant for months on end, depending on the economic conditions.
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