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Just how do lenders set interest levels on loans?

Just how do lenders set interest levels on loans?

Funding and running costs, danger premium, target profit margin determine loan’s interest price

Competition between banking institutions affects interest levels

Most challenging section of loan rates is determining danger premium

For all borrowers, the facets that determine a bank’s rate of interest are really a secret. How can a bank determine what interest rate to charge? How come it charge different interest levels to various clients?