Abstract
The purpose of this research is that the surplus unit and deficit unit in the banking world are the main activities of its business, in the surplus unit the bank issues a number of expenses (costs) of funds collected in the form of Cost of Fund (COF) where the costs that must be debited by the bank for each fund that has been collected (surplus units) from various sources before deducting the minimum mandatory liquidity charges / costs that must be incurred by the bank. A very meaningful source of funds for banks with the aim of increasing the amount of credit / income that they want to distribute to customers, in this case banks channeling credit really need adequate / available funds. The variables of this study consist of Cost of Funds (COF) deposits and credit interest rates. The final result of this study is that the cost of funds (COF) deposits has a significant effect on loan interest rates.
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