LENDING HOME

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Comment by John Sahaj on May 21, 2014 at 9:36am

Companies or individuals make money in the loan business by borrowing money at an interest rate (say 3%) and then loaning it to other people and charging them an interest of 4% for example. A company loaning money at 0.1% would be borrowing money at 0.05% or something. Either that or they don't plan to be in business very long.

As of the date I am writing this, (May 2, 2014) here are some prime interest rates in major financial markets. These are the rates which central banks loan to other banks. That means the banks will pay at least 1% more for a loan that the rate which they borrow from the central bank.


USA: 2%
U.K.: 5%
Euro Zone: 4.25%
Canada: 3%
Japan: 0.5%
Switzerland: 2.75%

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