Where do I find the interest rate indexes that lenders use to calculate their rates?
There are several places to go to find the current rates for Prime, T-bill, LIBOR and the other instruments that lenders use to set their interest rates, but we suggest you bookmark the following site: http://www.bankrate.com/brm/ratehm.asp. Many newspapers, like the Wall Street Journal, or other business publications list these rates as well. When you go to the above site there will be many indexes listed. The three main indexes that lenders use for private loans are: Wall Street Journal (WSJ) Prime 91 day T-Bill 1 month LIBOR Often times lenders will use an average of these rates over a period of time, so although these rates will be very close, you should consult your lender for exact rates. Why do lenders use different indexes to determine their interest rate? Lenders select different indexes (such as LIBOR, Treasury Bill, Prime or Commercial Paper rate) for varying reasons. Lenders main objective is to minimize the difference between their cost-of-funds (COF) and loan yields, to a
