U.S. Bank Increases Prime Lending Rate to 8.25% – How It Impacts Your Loans
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Summary:
U.S. Bank has announced that it has increased its prime lending rate to 8.25 percent, up from 8.00 percent, at all U.S. Bank and Union Bank locations. The changes came into effect on May 4, 2023.
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U.S. Bank Increases Prime Lending Rate to 8.25 Percent
U.S. Bank, one of the largest banks in the United States, has increased its prime lending rate to 8.25 percent from 8.00 percent. The bank’s reference rate at all Union Bank locations will also increase to 8.25 percent. The changes were effective from May 4, 2023.
This move by U.S. Bank comes as the Federal Reserve is expected to continue raising interest rates in the face of inflationary pressures. The prime rate, which is a benchmark for many consumer and business loans, tends to move in tandem with the federal funds rate set by the Federal Reserve. As a result, borrowers may see their loan payments increase due to the higher prime rate.
What does this mean for borrowers?
Let’s say you have a personal loan of $10,000 with a term of 60 months and an interest rate of prime 8%. If the prime rate increases to 8.25%, it would result in an additional $71.9 in interest charges, making the total cost of the loan $12,237.75.
Alternatively, suppose your business has a loan of $100,000 with a term of 120 months and an interest rate of 8%. If the prime rate increases to 8.25%, the new interest rate would result in an additional $1590 in interest charges, making the total cost of the loan $147,183.15.
These are just examples, and actual interest rates and loan terms may vary. It’s important for borrowers to carefully consider the impact of interest rate changes on their loan payments and overall financial situation.
Key Takeaways
- U.S. Bancorp has increased its prime lending rate to 8.25 percent from 8.00 percent, effective May 4, 2023, at all U.S. Bank locations.
- The reference rate at all Union Bank locations will also increase to 8.25 percent from 8.00 percent.
- These changes reflect an overall trend of increasing interest rates in the U.S. economy, which could impact borrowing costs for consumers and businesses.
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