Benchmark Lending

Benchmark lending is something that has to do with interest rates and banking. The benchmark rate is set by the Federal Reserve in the United States, and it is the interest rate the banks pay when they borrow money. That’s right; your bank borrows money, too. They must have a certain amount of money on reserve, and when they don’t they borrow money over a very short term (such as one night).

Banks and mortgage companies seek out people who might need a loan. Banking makes its money on loans; it’s just a valuable business to be a part of when there are lots of customers.