What is the usual interest rate for a senior loan?

The usual interest rate for a senior loan typically falls within the range of 3-6%. Senior loans are often secured by collateral, typically the property itself, which reduces the lender's risk. This secured nature allows lenders to offer competitive interest rates while still earning a reasonable return for their investment.

When assessing interest rates for loans, various factors come into play, including the current market conditions, the prevailing benchmark rates, and the risk associated with the specific loan. Senior loans generally represent a lower risk compared to subordinated debt, which is why their interest rates are typically on the lower end of the spectrum. The 3-6% range is consistent with prevailing market norms for senior secured lending, particularly in a stable economic environment.