How is a personal loan origination fee calculated and when is it paid?

How origination fees work in practice: You apply for $10,000. Lender approves $10,000 with a 5% origination fee ($500). You receive $9,500 in your bank account. You repay $10,000 (the full face amount of the loan) plus interest over the loan term. The APR calculation includes the origination fee, so comparing APRs across lenders (including those with and without origination fees) is an apples-to-apples comparison.

Fee ranges by lender type: No origination fee: SoFi, Lightstream, Discover Personal Loans, PenFed Credit Union. 0%-5%: Upgrade (1.85%-9.99%), LendingClub (2%-6%), Achieve (1.99%-6.99%). 1%-10%: Avant (1.5%-9.99%), Upstart (0%-12%). OneMain Financial: origination fee is either flat ($25-$500) or 1%-10% depending on state and loan size.

Adjusting your loan amount for origination fees: If you need exactly $10,000 in hand and the lender charges 5%, you must apply for $10,527 ($10,000 / 0.95 = $10,526.32) to net $10,000 after the fee deduction. Build this calculation in when determining how much to apply for.

Comparing loans with and without origination fees: A loan with no origination fee at 14% APR vs. a loan with 5% origination fee at 11% APR - which is cheaper? It depends on the loan term. For shorter terms (1-2 years), the no-fee loan wins because the fee's one-time cost is large relative to the short interest accrual period. For longer terms (5+ years), the lower rate loan may win because interest savings compound over many years. Use the total interest + fee comparison, not just the APR, for exact dollar amounts.