Q: What exactly is the “prime rate?” How does it affect me as an individual?
A: The prime rate is the current interest rate that financial institutions in the U.S. charge their best customers. These customers have excellent credit, and are eligible for this optimal rate because their loans carry the lowest risk for their financial institutions.
The prime rate is also referred to as the prime interest rate, prime lending rate or simply prime. You may hear this term thrown around a lot in the financial news or when reading up on loans and mortgages. That’s because the prime rate affects every level of the economy.
We have answers to all your questions on the prime rate.