What Is the Prime Lending Rate?

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The prime lending rate is the lowest possible interest rate that a bank will offer its best clients. Pay the prime lending rate on loans by having excellent credit and the ability to pay back a loan with advice from an investment consultant in this free video on interest rates.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hello my name is Roger Groh. Today we are here to talk about prime lending rate. What is it? Who qualifies for it and what is that specific rate today? Well a prime lending rate is the rate that a bank's best clients are going to receive. Best clients are defined as the clients that pay regularly on time and b) can handle the risk and are likely to continue to pay. Today according to bluebird.com the prime lending rate in the United States is 3.25%. Anything that you pay above that will be because your credit quality is not sufficient to enable you to qualify for that lower rate. You can always look at it as I did, go to bluebird.com. There is a page in there for overall interest rates of which one is prime. You can take a look. It has gone down considerably over the last year. It is about half today of what it was a year ago and in all likelihood it will continue to fall over the next couple of months. I'm Roger Groh and that's a little bit about prime lending rates.


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