Loan benchmark rates are standard interest rates used by lenders to determine the interest rates they charge borrowers. These rates serve as a reference point, helping banks and financial institutions set their own rates for various types of loans, such as mortgages and personal loans. Common benchmark rates include the London Interbank Offered Rate (LIBOR) and the Secured Overnight Financing Rate (SOFR). When benchmark rates rise or fall, it can directly impact the cost of borrowing for consumers and businesses. For example, if the Federal Reserve increases its benchmark rate, lenders may raise their loan rates, making it more expensive to borrow money. Conversely, lower benchmark rates can lead to cheaper loans, encouraging borrowing and spending.