What is a Prime Interest Rate Loan?
The prime interest rate is the interest percentage set by the Federal Reserve. The Federal Reserve’s goal in setting this rate is to control inflation, increase or stimulate economic growth and lower unemployment. Banks and other lending institutions use this rate as a baseline for the interest rates they offer on loans. Some banks may offer below prime rate loans in an attempt to garner additional business, but most institutions use this is a minimum interest rate. What is a Locked In Interest Rate Loan? A locked in interest rate, also known as a fixed rate, is where you and your lender agree to a fixed rate for the duration of your loan. The rate is negotiated when you take out your loan and is usually based on your credit rating, assets and the size of your down payment. Fixed rate mortgage loans are typically offered for 30, 20,15 and 10 year plans. Benefits The primary benefit to a locked in interest rate is that you always know how much and how long you will be paying. With a loc
