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United States 'Prime Rate'

As of January 1, 2009, the US Prime Rate is
3.25%

The Prime Rate is set by the Federal Reserve and is used by banks to make short-term unsecured loans to customers in very good standing. Most interest rates are based on the Prime Rate, such as Home Equity rates, credit card rates, and even home mortgage rates.

When the Fed changes the Prime Rate, it is usually a very big deal. This is because it alters everything -- in a sense it changes the value of money in terms of borrowing. For example, if your home loan is at 6.5%, and the Federal Reserve lowers the Prime Rate to 5.75%, it is possible that you can get a new loan (refinance) at a lower interest rate because loan rates are based on the Prime Rate. Basically, this means that you may be able to borrow the money for less because the federal interest rates are now lower than they were when you first got your home loan.

Recent Prime Rate Changes

Legal Tender Cash Money The Prime Rate can change frequently, based on the Federal Reserve's determination, however it has not changed since 2009:
Prime Rate History
Jan, 2009 3.25 % Decrease
Nov, 2008 4.00 % Decrease
Apr 30, 2008 5.00 % Decrease
Mar 18, 2008 5.25 % Decrease
Jan 30, 2008 6.00 % Decrease
Jan 22, 2008 6.50 % Decrease
Dec 11, 2007 7.25 % Decrease
October 31, 2007 7.50 % Decrease
September 18, 2007 7.75 % Decrease
June 29, 2006 8.25 % Increase
May 10, 2006 8.00 % Increase
March 28, 2006 7.75 % Increase
Jan 31, 2006 7.50 % Increase
Dec 2005 7.25 % Increase
Nov 2005 7.00 % Increase
Sep 2005 6.75 % Increase