Prime Lending Rate Calculator
The Prime Lending Rate (PLR) is a benchmark interest rate used by banks to determine the interest rates they offer to their most creditworthy customers. It is typically set by a central bank or a major financial institution and serves as a reference point for a wide range of loan products, including personal loans, business loans, and mortgages.
While the exact formula can vary slightly between institutions and economic conditions, a common approach to understanding how the Prime Lending Rate is influenced involves considering the central bank's policy rate and a spread that reflects the bank's own costs and risk assessment. For simplicity and illustrative purposes, this calculator demonstrates a conceptual model where the Prime Lending Rate is derived from a base rate (often influenced by the central bank's target rate) plus a risk premium.