What is lending rate? How to use in English

Definition & pronunciation of lending rate

lending ratenoun
lãi suất cho vay
/ˈlendɪŋ reɪt//ˈlendɪŋ reɪt/

Where does the word lending rate come from?

The term "lending rate" refers to the interest rate that a financial institution charges borrowers for borrowing money. The lending rate is determined by a combination of factors, including the institution's cost of funds (i.e., the amount it pays to gain access to funds), its risk appetite (i.e., how much risk it is willing to take on), and the prevailing economic conditions (i.e., the level of inflation, expectation of future interest rate trends, and the overall health of the economy). Banks and other financial institutions use the lending rate to make a profit by charging borrowers more interest than what they pay their depositors (who lend them the funds in the first place). The lending rate is an essential component of the financial system, as it helps to regulate the flow of credit in the economy and encourage investment and growth.

Example of vocabulary lending ratenamespace

The central bank announced a decrease in the lending rate, which should help boost economic growth by making it cheaper for businesses and individuals to borrow money.
Despite the recent cut in the lending rate, many banks are still charging higher interest rates on loans due to their own financial situations.
As the lending rate drops, consumers are becoming more interested in taking out loans, as it will be less expensive to do so.
The current lending rate is at a historic low, so now is the perfect time for homeowners to consider refinancing their mortgages.
The lending rate is affecting many savers as well, as lower interest rates mean less income on savings accounts.