FACTORS AFFECTING LOAN INTEREST

Abstract

This paper analyzes the main factors affecting credit interest rates. Bank loans are one of the key financial instruments in the economy, and their interest rates largely depend on the macroeconomic situation, the level of inflation, monetary policy, the balance of demand and supply, as well as the resource base of commercial banks. In addition, the borrower’s solvency, credit risk, collateral, and loan maturity play an important role in determining interest rates. Studying this topic is important for understanding the activities of commercial banks, increasing their efficiency, and ensuring economic stability.