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Lenders sometimes charge fees on personal loans. One of the most common is an origination fee — an administrative fee that you pay a lender in return for borrowing money. This type of fee is usually deducted from your loan amount before the funds are disbursed.
While avoiding an origination fee on your loan means you’ll receive more of your loan funds to start, it could sometimes be worth paying an origination fee if you can get a good interest rate from the lender.
Here’s what you should know about personal loan origination fees:
- What is an origination fee?
- How can I avoid origination fees?
- Additional personal loan factors to consider
What is an origination fee?
A loan origination fee is the price charged by a lender in return for offering a loan. In some cases, you might see an origination fee referred to as an application or processing fee.
Origination fees for personal loans typically range from 1% to 10%, depending on the lender. The higher the origination fee, the less money you’ll actually get from your loan.
In some cases, lenders might let you roll the fee into the repayment of your loan instead of deducting it before disbursement. While this might sound like it would save you money, keep in mind that this means you’d pay interest on the fee as well as your principal balance.
Learn More: How to Get a Personal Loan
Why is there an origination fee?
Lenders charge origination fees to cover various expenses that come with offering loans. For instance, this kind of fee could include the cost of processing your application, underwriting, funding, and other administrative services.
For instance, if you take out a personal loan from Upgrade, the origination fee could be anywhere from 1.85% to 8.99%. The actual amount you’ll be charged will depend on several factors, such as your credit and income.
Check Out: Where to Get a Personal Loan
How can I avoid origination fees?
If you’d like to avoid origination fees, here are a couple of options:
- Work with a lender that doesn’t charge them. Some lenders don’t charge origination fees on their personal loans.
- Ask for the fee to be waived. In some cases, a lender might be willing to waive an origination fee — for example, if you agree to pay a higher interest rate or are able to show a better offer from another lender.
This is why it’s critical to take the time to do your research and compare your options from as many lenders as possible. This way, you’ll be able to more easily find a good deal on a loan — whether it comes with an origination fee or not.
If you’re ready to start loan shopping, Credible can help. You can compare your prequalified rates from multiple lenders in just two minutes.
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Additional personal loan factors to consider
As you weigh your personal loan options, it’s important to consider as many lenders as you can to find the right loan for your needs.
In addition to origination fees, here are several factors to keep in mind as you shop around:
- Loan types: Most personal loans are unsecured, which means you don’t have to worry about collateral. There are also some lenders that offer secured personal loans where you can provide an item of value to secure the loan, such as a vehicle or jewelry. Because secured loans aren’t as risky for the lender, they tend to come with lower interest rates — but if you can’t keep up with your payments, you could lose your property.
- Interest rates: The average personal loan interest rate ranges from 4.99% to 36%. The rate you get on a loan will play a major role in determining your overall loan cost — the lower your rate, the less you’ll pay over time. Keep in mind that your credit and the repayment term you choose will also impact the rates you’re offered.
- Repayment terms: You’ll typically have one to seven years to repay a personal loan, depending on the lender. It’s usually best to choose the shortest term you can afford to keep your interest costs as low as possible. Many lenders also offer better rates to borrowers who opt for shorter terms.
- Loan amounts: Personal loans generally range from $600 to $100,000 or more, depending on the lender. Be sure to borrow only what you need so your future repayment costs are manageable.
- Time to fund: The time to fund for a personal loan is usually about one week — though there are also some lenders that will fund loans as soon as the same or next business day after approval.
- Minimum credit score: You’ll generally need good to excellent credit to qualify for a personal loan. A good credit score is usually considered to be 700 or higher. There are also several lenders that offer personal loans for bad credit — however, these loans also tend to come with higher interest rates compared to good credit loans. If you have poor credit, you might also find yourself saddled with higher origination fees from some lenders.
If a personal loan seems like the right fit for your needs, remember to consider as many lenders as you can to find the right loan for you. Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in two minutes.
| Lender | Fixed rates | Loan amounts | Loan terms (years) | Origination fee? |
|---|---|---|---|---|
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 29.99% APR | $10,000 to $35,000 | 2, 3, 4, 5 | Yes |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.95% - 35.99% APR | $2,000 to $35,000** | 2, 3, 4, 5* | Yes |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.79% - 20.84% APR | $10,000 to $50,000 | 3, 4, 5, 6 | Yes |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 35.99% APR | $2,000 to $50,000 | 2, 3, 4, 5 | Yes |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 24.99% APR | $2,500 to $35,000 | 3, 4, 5, 6, 7 | No |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 9.57% - 35.99% APR | $1,000 to $40,000 | 3, 5 | Yes |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 35.99% APR | $2,000 to $36,500 | 2, 3, 4, 5, 6 | Yes |
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 7.99% - 25.49% APR with autopay | $5,000 to $100,000 | 2, 3, 4, 5, 6, 7 (up to 12 years for home improvement loans) | No |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 18.0% - 35.99% APR | $1,500 to $20,000 | 2, 3, 4, 5 | Yes |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 17.99% APR | $600 to $50,000 (depending on loan term) | 1, 2, 3, 4, 5 | No |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.99% - 25.81% APR10 | $5,000 to $100,000 | 2, 3, 4, 5, 6, 7 | No |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 11.69% - 35.99% APR7 | $1,000 to $20,000 | 3, 5 | Yes |
|
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Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 8.49% - 35.99% APR | $1,000 to $50,000 | 2, 3, 5, 6 | Yes |
|
||||
Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.
| 5.2% - 35.99% APR4 | $1,000 to $50,0005 | 3 or 5 years4 | Yes |
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About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.60%-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 10%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.
