What is an origination fee?
Origination fee: An origination fee is a one-time charge some lenders take for processing a new loan. It is often deducted from the loan amount before the money reaches you.
Origination fees can be a flat dollar amount or a share of the amount borrowed, and some lenders charge none at all. Because the fee is part of the cost of borrowing, it is reflected in the loan's APR.
If the fee is taken out of the loan, you receive less than the amount you borrowed but repay the full amount. On a smaller loan, a fee makes a bigger difference to what you actually receive.
When you compare offers
Ask how much will actually be deposited, and compare offers by APR and total repayment rather than the interest rate alone.
Related guides
- Loan Origination Fees, Explained
What loan origination fees are, how they factor into APR, and a simple illustrative example that can help you compare the true loan cost.
- Comparing Offers: APR, Fees and Term
A plain-language guide to the three numbers that matter most when comparing loan or credit offers — APR, fees and term length.
This glossary is for general educational purposes and isn't financial, legal or insurance advice. Lendara is not a lender and does not make credit decisions. Lendara is a free online marketplace that connects you with participating lenders and providers, who set their own eligibility rules, rates, fees and terms. Lendara may receive compensation from partners, which may affect which offers appear and their order.