Interest Rates
The interest rate of a loan is the amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time.
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What is London Interbank Offered Rate (LIBOR)?
The London Interbank Offered Rate (LIBOR) is a set of interest rates calculated from submissions by large global banks. LIBOR rates are supposed to represent the cost of borrowing among the banks. U.S. Dollar LIBOR is the […]
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What type of accounts are affected by London Interbank Offered Rate (LIBOR)?
Adjustable-Rate Mortgages, home equity line of credit (HELOC) accounts (including open-end reverse mortgages, open-end accounts such as credit cards, overdraft lines of credit, private student loans, and other closed-end […]
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What do I need to know if I have a loan or line of credit based on London Interbank Offered Rate (LIBOR)?
If you have a loan or line of credit based on LIBOR, your bank or servicer may change to a different index. You should review your account agreement (or “contract”) and contact your bank or servicer directly if you have […]
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Where can I find more information about London Interbank Offered Rate (LIBOR)?
You may find more information on this website which may be updated as needed. Additional information can be found on the Consumer Financial Protection Bureau (CFPB) website.
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Can I obtain information from the Federal Reserve about interest rates?
Yes. You can contact the Federal Reserve for information about interest rates. The Federal Reserve has FAQs available at https://www.federalreserve.gov/faqs.htm. Information on why interest rates matter can be found at […]
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What rates may be used in place of London Interbank Offered Rate (LIBOR)?
In the U.S., SOFR (Secured Overnight Financing Rate) is a replacement rate selected by a committee organized by the Federal Reserve Board called the Alternative Reference Rates Committee (ARRC). For consumer products, SOFR […]
What rates may be used in place of London Interbank Offered Rate (LIBOR)?Read more →
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Information was added to my periodic statement notifying me of the London Interbank Offered Rate (LIBOR) transition to my existing loan. Do I need to take any action?
Generally, no. If you have questions about changes to your loan, however, you should contact your bank or servicer directly.
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When will London Interbank Offered Rate (LIBOR) be phased out?
U.S. Dollar LIBOR rates cover a range of lending terms (overnight, 1 week, 1/2/3/6 months, and 12 months). The publication of USD LIBOR one week and two-month maturities stopped on December 31, 2021. All remaining USD LIBOR […]
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Why is London Interbank Offered Rate (LIBOR) going away?
LIBOR’s reputation was severely tarnished by scandals where several global banks were fined as a result of the investigations of LIBOR manipulation. As a result of these issues, LIBOR has been in the process of phasing out […]
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What options do I have if I have a loan that is affected by London Interbank Offered Rate (LIBOR)?
If you have an existing adjustable-rate LIBOR contract, your contract should be converted by June 30, 2023. In the event that your bank or servicer has not communicated with you about the transition and conversion, you […]
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I am currently looking to enter into a new adjustable-rate London Interbank Offered Rate (LIBOR) based loan, will this affect me?
If you are considering entering into a new adjustable-rate loan, the reference rate should not be in LIBOR at this time. If you are looking to use LIBOR, you should ask your bank or servicer why they are using a rate that is […]
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How will the change from London Interbank Offered Rate (LIBOR) to Secured Overnight Financing Rate (SOFR) or other replacement rate affect my payment on my adjustable-rate mortgage (ARM), reverse mortgage, Home Equity Line of Credit (HELOC), student loan, credit card, or other consumer loan?
Your payment could change, depending on the new rate chosen by your bank or servicer. You should receive communications from your bank or servicer explaining how your rate and payment will be affected by the change from […]
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What is Secured Overnight Financing Rate (SOFR)?
Secured Overnight Financing Rate (SOFR) is the replacement to LIBOR. It is a secured interbank overnight interest rate and reference rate established as an alternative to LIBOR. SOFR is calculated differently from LIBOR and […]
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