What Is an Origination Fee?
An origination fee is a one-time, upfront charge that a lender imposes to process your loan application, underwrite the loan, and fund the loan. In the context of personal loans, the fee is typically deducted from the loan amount before you receive the funds, so you receive less than the full principal but still repay the full amount.
Sources: Consumer Financial Protection Bureau, SoFi, Discover
How Origination Fees Are Calculated
Personal loan origination fees typically range from 1% to 10% of the loan amount, though some lenders may charge up to 12%. The exact fee depends on the lender and your creditworthiness. Lenders may charge a flat fee (such as OneMain Financial’s $25 to $500 range) or a percentage of the loan amount (1% to 10% at OneMain).
- Typical range: 1% to 10% of the loan amount.
- Some lenders charge up to 12% or as low as 0%.
- The fee is often deducted from the loan proceeds, so you receive less than the loan amount but repay the full principal.
Sources: Bankrate, SoFi, Discover, Upstart, OneMain Financial
Origination Fee vs. Interest Rate: The True Cost
Origination fees add to the total cost of your loan. A loan with an origination fee and a lower interest rate may have a higher APR than a no-fee loan with a higher interest rate, because APR includes both the interest rate and certain fees, including origination fees. So it’s important to compare loans based on APR rather than just the interest rate.
Typical Origination Fee Ranges by Lender Type
Lender origination fees vary. The table below lists examples from major lenders, based on publicly available information. Some lenders charge no origination fee, while others charge a percentage of the loan amount. Some lenders, like SoFi, offer a choice between paying an origination fee to lower your interest rate or opting for a no-fee loan with a higher rate.
| Lender | Origination fee | Notes |
|---|---|---|
| Achieve | 1.99% - 8.99% | Percentage of loan amount |
| Alliant Credit Union | None | No origination fee |
| American Express | None | No origination fee |
| Best Egg | 0.99% - 9.99% | Percentage of loan amount |
| Citibank | None | No origination fee |
| Discover | None | No fees of any kind |
| Happy Money | 0% - 5% | Percentage of loan amount |
| LendingPoint | Up to 10% | Percentage of loan amount |
| LightStream | None | No origination fee |
| M&T Bank | None | No origination fee |
| Navy Federal Credit Union | None | No origination fee |
| OneMain Financial | $25 - $500 flat or 1% - 10% | Varies by loan |
| PenFed Credit Union | None | No origination fee |
| Prosper | 1% - 9.99% | Percentage of loan amount |
| SoFi | 0% - 7% | Optional fee to lower rate |
| Splash Financial | 0% - 12% | Percentage of loan amount |
| TD Bank | None | No origination fee |
| Upgrade | 5% | Percentage of loan amount |
| Upstart | 0% - 12% | Percentage of loan amount |
| USAA | None | No origination fee |
Sources: Bankrate, Discover, Citi, OneMain Financial
How to Find Loans with No Origination Fees
Some lenders offer personal loans with no origination fee. Many credit unions and banks—such as Alliant Credit Union, Citibank, Discover, LightStream, and PenFed—do not charge an origination fee on personal loans. Online lenders like SoFi may offer a no-fee option, though they may charge a higher interest rate. Your credit score can also influence fee levels; borrowers with higher credit scores may qualify for lower or no origination fees.
- Check lenders that advertise no origination fees, such as Discover, LightStream, or Alliant Credit Union.
- Compare loan offers—a no-fee loan with a higher interest rate might cost less overall than a loan with an origination fee and a lower rate.
- Improve your credit score to increase your chances of qualifying for a lower fee or no fee.
The Impact of Origination Fees on Your APR
The APR reflects the true cost of borrowing because it includes the origination fee and other loan costs in addition to the interest rate. When you compare personal loans, look at the APR, not just the interest rate, to understand the full impact of fees.
Origination Fees and Your Total Loan Amount
Because origination fees are often deducted from the loan proceeds, you must plan for receiving less than the full loan amount. Always confirm how the fee is applied before signing.
Frequently asked questions
Are origination fees negotiable?
In practice, some lenders may be willing to adjust or waive the fee, but it often depends on your creditworthiness. You can always ask the lender if they will reduce or remove the fee, especially if you have strong credit.
Sources: Bankrate, SoFiDo all lenders charge origination fees?
No, not all lenders charge origination fees. Many lenders, including Discover, LightStream, and various credit unions, offer personal loans with no origination fee. However, no-fee loans might carry a higher interest rate, so it's important to compare APRs.
Sources: Bankrate, DiscoverIs an origination fee the same as an application fee?
No, an origination fee is not the same as an application fee. An origination fee covers the cost of processing, underwriting, and funding the loan. An application fee is a separate charge some lenders use to cover the cost of processing your loan application. Origination fees are typically a percentage of the loan amount, while application fees are usually flat amounts.
Sources: Consumer Financial Protection Bureau, SoFiCan I roll the origination fee into the loan amount?
The typical practice is that the origination fee is deducted from the loan proceeds, not added to the loan amount. Some lenders might allow you to finance the fee by increasing the loan amount, but this would increase the total interest you pay. Confirm directly with the lender.
Sources: Discover, UpstartSources
- What are mortgage origination services? What is an origination fee? — Consumer Financial Protection Bureau
- Personal Loan Origination Fees: What To Know — Bankrate
- Everything You Need to Know About Personal Loan Origination Fees — SoFi
- What Is a Personal Loan Origination Fee? — Discover
- What Is a Personal Loan Origination Fee? — Upstart
- How to Get a Personal Loan With No Origination Fee — Experian
- Personal Loan Origination Fee | Citi.com — Citi
- What Is an Origination Fee on a Personal Loan? - OneMain Financial — OneMain Financial