
Prime   • Is an administered rate announced by large banks. Recently, banks have been making belowprime loans which makes prime rate pretty arbitrary.    Embedded terms in definition   Prime rate
   Referenced Terms   Base rate: Base Rate is quoted off a short term fluctuating rate such as LIBOR or Prime Rate. LIBOR denotes London InterBank Offered Rate. Prime is an administered rate announced by large banks. Hence a base rate may be quoted as LIBOR plus say 1%.
  Fixed rate loan: A loan with a rate of interest that is determined at a set increment above the Prime rate at which it remains fixed until maturity.A loan on which the rate paid by the borrower is fixed for the life of the loan.A loan on which the rate paid by the borrower is fixed for the life of the loan.
  Floating rate loan: A loan with a rate of interest initially set at a state premium above the Prime rate and allowed to float, or vary, as the prime rate varies until maturity.
  Prime rate: The interest rate at which banks lend to their best (Prime) customers. Much more often than not, a bank's most creditworthy customers borrow at rates below the prime rate.The lowest rate of interest charged by leading banks on business loans to their most secure business borrowers.The rate at which banks lend to their (supposedly) best (Prime) customers. The allin cost of a bank loan to a prime credit equals the prime rate plus the cost of holding compensating balances.The interest rate that commercial banks charge their Prime or most creditworthy customers, generally large corporations.
  Prime rate: The interest rate at which banks lend to their best (Prime) customers. Much more often than not, a bank's most creditworthy customers borrow at rates below the prime rate.The lowest rate of interest charged by leading banks on business loans to their most secure business borrowers.The rate at which banks lend to their (supposedly) best (Prime) customers. The allin cost of a bank loan to a prime credit equals the prime rate plus the cost of holding compensating balances.The interest rate that commercial banks charge their Prime or most creditworthy customers, generally large corporations.
   Related Terms   Prime rate


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