Sunday, January 1st, 2023

Prime Rate Update

You may have seen a recent adjustment to your loan interest rate. Due to the Federal Reserve federal funds interest rate increase on December 15, effective December 26, the new Assemblies of God Credit Union prime rate is moving to 7.50%.

What is the U.S. Prime Rate?

The United States Prime Rate is a commonly used interest rate in the banking system of the United States. The Prime Rate is the interest rate that financial institutions use to set rates for different types of loans, credit cards, and lines of credit. The published rate may also affect specific mortgage rates, like variable rate mortgages, home equity loans, and home equity lines of credit. The Prime Rate is consistent because financial institutions want to offer businesses and consumers loan profitable and competitive products. A consistent U.S. Prime Rate also makes it easier and more efficient for individuals and businesses to compare similar loan products offered by competing financial institutions.

What does the Prime Rate mean to you?

The Prime Rate rate can affect many areas of your life, including credit card interest rates, small business loans, mortgages, and personal loans. It serves as a baseline that most financial institutions use to determine what interest rate to give customers. Following updates on this rate will help you make important decisions, such as what type of loan or mortgage to choose or even what APR you should be looking for when opening a new credit card. AGCU may price loans to its members at, above, or below the prime rate.

Why does the Prime Rate change, and how often?

Usually, the U.S. Federal Reserve meets around six times a year to discuss the federal funds rate. Based on the economy’s current state and future projection path, the Federal Reserve may choose to increase or decrease the rate. From this meeting, the Federal Reserve announces their change to the federal funds rate, and financial institutions adjust their interest rates to follow the Federal Reserve’s decision. Because of the frequency of changes in the rate and its influence over loans, credit cards, and mortgages, it’s essential to check for updates routinely.

Questions?

Contact a loan officer today by calling (417) 831-4398 or fill out our contact form, and we will reach out to you.

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