Interest Rate Ceiling

An interest rate ceiling is a government-imposed maximum limit on the interest a lender can charge on loans or offered on savings accounts. It is set to protect consumers from excessively high rates, ensuring borrowing remains affordable and savings are reasonably rewarded. While it can benefit borrowers by preventing usurious rates, it may also discourage lenders from offering certain financial products if the ceiling is too low, potentially reducing credit availability. Essentially, it’s a regulatory cap designed to balance protecting consumers with maintaining a healthy lending market.