Prime Rate
The interest rate that commercial banks charge their most credit-worthy customers. Generally a bank's best customers consist of large corporations. Investopedia Says:
Default risk is the main determiner of the interest rate a bank will charge a borrower. Because a bank's best customers have little chance of defaulting, the bank can charge them a rate that is lower than the rate that would be charged to a customer who has a higher likelihood of defaulting on a loan. Related Terms:
Bank Rate
Cap
Central Bank
Discount Rate
Federal Reserve Bank
Interest Rate
Points
Prime
Subprime Loan |