Origination fee
A one-time fee a lender charges to process a new loan. Usually 1% to 8% of the loan amount, deducted from the proceeds or added to the balance.
Full definition
An origination fee is a one-time fee a lender charges to underwrite and process a new loan. Personal-loan origination fees typically range from 1% to 8% of the loan amount and are either deducted from the funds disbursed to the borrower or added to the loan balance. Because origination fees are rolled into APR under TILA, comparing APRs (rather than headline interest rates) accounts for them automatically.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
- APR (Annual Percentage Rate)APR is the yearly cost of borrowing, expressed as a percentage of the loan amount. It includes interest plus most lender fees, so it's a more complete measure of cost than the interest rate alone.
- Interest rateThe interest rate is the percentage of the loan balance charged per year as interest, excluding fees. It is a component of, but smaller than, the APR.
- Fixed interest rateA fixed rate stays the same for the entire life of the loan, so the monthly payment never changes. Most U.S. personal loans are fixed-rate.
- Variable interest rateA variable rate can change over the life of the loan, usually tied to an index like the prime rate. Monthly payment can rise or fall.
- Prime rateThe prime rate is the benchmark interest rate U.S. banks publish for their most creditworthy commercial customers. Many consumer rates are quoted as prime + a margin.
- Loan termThe loan term is how long you have to repay the loan, usually expressed in months. Common personal-loan terms are 24, 36, 48, 60, and 72 months.
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