The purpose of this research is to examine the factors that affect commercial banks' lending rates in Nepal. The lending rate is the outcome variable and operating cost to total assets (OCTA), deposit rate (DR), profitability (ROA) and Non performing loan explanatory variables. The necessary data are collected from the annual report of sample banks, banking and financial statistics, and the bank supervision report published by the Central Bank of Nepal. This study has used a descriptive and causal comparative research design. Similarly, Eviews-12 computer software has been employed for diagnosis, model fit, and analysis of data. Fourteen commercial banks have used as a data sample and tracked for a total of six years (2016 to 2021). The research employed the pooled OLS model, fixed effects model, and random effects model. Three different regression models predict that deposit rate has the significant impact on the bank’s lending rate and operating costs to total assets ratio, return on assets (ROA), non performing assets have no strong effect on the interest rate offered by commercial banks.