Prime Interest Rate (Noun)
Meaning
The interest rate on short-term loans that banks charge their commercial customers with high credit ratings.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The central bank lowered the prime interest rate to stimulate economic growth during the recession.
- Banks use the prime interest rate as a benchmark to set interest rates for other types of loans.
- The company's excellent credit history allowed it to secure a loan at the prime interest rate.
- A decrease in the prime interest rate can lead to increased borrowing and spending by businesses.
- The prime interest rate is typically reserved for a bank's most creditworthy commercial customers.