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.
Investment dictionary. Academic. 2012.
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Prime rate — Prime rate, or Prime Lending Rate, is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility,… … Wikipedia
Prime Rate — Prime|rate, die; , Prime Rate, die; [ pra̮imreɪt ; engl. prime rate, aus: prime = Haupt ; hauptsächlich u. rate = Rate; Zins , Steuersatz] (Wirtsch., Bankw.): (in den USA) Zinssatz, den Großbanken für ihre Kredite berechnen u. der die Funktion… … Universal-Lexikon
prime rate — n: an interest rate formally announced by a bank to be the lowest available at a particular time to its most creditworthy customers – called also prime, prime interest rate; Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
prime rate — n. Finance the most favorable interest rate charged by a commercial bank on short term loans to large corporations: also prime interest rate or prime lending rate … English World dictionary
prime rate — prime rates N COUNT A bank s prime rate is the lowest rate of interest which it charges at a particular time and which is offered only to certain customers. At least one bank cut its prime rate today … English dictionary
prime rate — prime′ rate′ n. ban bus the minimum interest rate charged by a commercial bank on short term business loans to large, best rated customers or corporations Also called prime 18) prime′ in′terest rate … From formal English to slang
prime rate — or prime interest rate Fin the lowest interest rate that commercial banks offer on loans … The ultimate business dictionary
prime rate — ● prime rate nom masculin (anglais prime rate, meilleur taux) Aux États Unis, taux d intérêt appliqué par une banque pour les crédits à court terme accordés à ses meilleurs clients … Encyclopédie Universelle
prime rate — prime .rate n the lowest rate of interest at which companies can borrow money from a bank →↑base rate … Dictionary of contemporary English
prime rate — prime ,rate noun count the lowest rate available for borrowing money … Usage of the words and phrases in modern English
prime rate — noun : an interest rate formally announced by a bank as the lowest normally available at a particular time to its most creditworthy customers * * * Banking. the minimum interest rate charged by a commercial bank on short term business loans to… … Useful english dictionary