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| About LIBOR |
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Lenders use financial indexes, such as the U.S. T-bill, Prime Rate, or LIBOR to set interest rates on loans. Usually, a loan's interest rate is set by using the value of the designated index and then either adding or subtracting a percentage (for example, Prime + 1%). Access Group private loan interest rates are set using the three-month LIBOR. |
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A Better Rate
for Our Borrowers |
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Access Group uses LIBOR because it allows us to offer our borrowers a better rate. That is because the interest rate we pay on the money we use to make our student loans is based on LIBOR. By charging our borrowers an interest rate directly related to our cost of funds, we will be able to provide more competitively priced loan programs over the long term. |
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| How Does LIBOR Compare To Other Indexes? |
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As the chart below indicates, over the past ten years, LIBOR has remained lower than the Prime rate, and followed a pattern very similar to that of the U.S. T-bill. And like T-bill, LIBOR rate changes historically have been in smaller increments, while the Prime rate has tended to move more sporadically and in larger increments. |
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| What is Libor? |
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LIBOR stands for London Interbank Offered Rate. It is the rate at which banks borrow funds from other banks in the London interbank market. It is also the most widely used benchmark or reference rate for short term interest rates on variable (adjustable) rate credit accounts/loans. |
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| What is the U.S. T-bill Average Discount Rate? |
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This is one of the rates established when U.S. Treasury bills (T-bills) are auctioned (traded) in financial markets. The U.S. Treasury Department auctions T-bills in order to borrow funds for the feeral government. T-bills are sold at a discount from their face value and then redeemed when they mature at full face value. The length of maturity varies from one month to 10 years. |
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| What is Prime Rate? |
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This is the rate at which banks lend money to their best customers. The most commonly used value is reported by the Wall Street Journal. The Prime Rate is an important index used by banks to set variable (adjustable) interest rates on numerous loan products, including credit cards, auto loans, mortgages, and student loans. |
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