Average rates and the quote check

Where the rates come from

The Federal Reserve Board publishes them in its G.19 Consumer Credit release, under "Terms of credit at commercial banks". We read the same series from FRED, the St. Louis Fed's public data service, and use the figures as published.

The Fed reports each quarter's figure under its middle month: February, May, August and November. We check for new figures on a schedule, and a person reviews each update before it is published. Nothing is fetched when you open a page.

Each new quarter is recorded on the what changed page with the day we published it. If the Fed later revises a figure, the old and new values are listed there too. The same figures are available as data.

From a rate to dollars

Each page turns the average into a payment and total interest on one example loan, using level-payment amortization. The example amount and term are ours; only the rate is the Fed's.

60-month new car loan: $25,000 over 60 months at 7.14%
payment      = $496.68 a month
interest     = $4,800.98 in all

The quote check

The same loan is worked out twice: once at the rate you type and once at the average. The result is the difference.

gap in points   = your rate − average rate
interest gap    = interest at your rate − interest at the average
payment gap     = payment at your rate − payment at the average

$25,000 over 60 months, offered 8.14%, average 7.14%:
gap in points   = 1.00
interest gap    = $714.21
payment gap     = $11.91 a month

A point here is a percentage point: 8% is one point above 7%.

Limits

• These are averages for commercial banks. Credit unions, finance companies and dealers are not in them, and no single lender is.
• An average covers borrowers with very different credit. A rate above or below it says nothing by itself about whether an offer is fair.
• They are interest rates, not APRs. Fees are not included.
• The credit card figure is for accounts that were charged interest. The quote check treats a card balance as cleared in equal monthly payments with no new spending.
• The figures are quarterly, so the latest average can be a few months old.