What term describes the rates charged by lenders for loans to customers?

The term that describes the rates charged by lenders for loans to customers is known as lending rates. These rates represent the cost to borrow money and can vary based on factors such as the type of loan, the borrower's creditworthiness, market conditions, and the policies of the financial institution.

Lending rates are critical in economic contexts, as they influence consumer spending, investment decisions, and overall economic activity. When lending rates are high, borrowing becomes more expensive, which can dampen spending and investment. Conversely, lower lending rates usually stimulate economic activity by making loans more accessible.

In contrast, the other terms have different meanings. Borrowing rates may refer to the rate paid by a borrower specifically, but the more commonly used term for the rate set by lenders is lending rates. The cash rate typically refers to the interest rate set by a central bank for overnight lending between banks and is a tool of monetary policy. Monetary policy itself encompasses a range of strategies used by a central bank to control the money supply, interest rates, and inflation, rather than specifically the interest rates charged by lenders for loans.