How loan rates are determined
Lenders establish their rates based on several factors. These include the prime rate (which is influenced by the Bank of Canada), inflation levels, the type of lending product you want, the amount you wish to borrow, and the term over which you plan to pay the funds back.
Generally, rates are lower when loans are secured with some form of collateral, as the lender has less risk to assume. Your credit rating will also be considered. A higher credit score indicates that you are a lower credit risk, and will likely entitle you to a better rate.
Because the features of a loan are as varied as the reasons for borrowing, it is important that you get the right loan for the right purpose. Your CIBC advisor can help you determine the best product for your personal situation.