An origination fee is a one-time charge some lenders apply when issuing a loan. It compensates the lender for the cost of processing the application, underwriting the loan, and funding the disbursement. Origination fees on personal loans typically range from 1% to 8% of the loan amount.

How origination fees work

Origination fees are almost always deducted from your loan proceeds rather than billed separately. If you borrow $10,000 at a 5% origination fee, you receive $9,500 in your bank account but you owe the lender $10,000 — plus interest — over the life of the loan. You pay interest on the full $10,000, including the $500 you never received.

Why they exist (and why they’re increasingly transparent)

Origination fees historically let lenders advertise a lower headline interest rate while still collecting their full intended margin via the upfront fee. Federal disclosure rules (Truth in Lending Act / Regulation Z) require fees to be reflected in the APR, which is why APR is the more accurate comparison number across lenders.

What competitors typically charge

• SoFi: 0% to 7% origination fee
• Best Egg: 0.99% to 8.99% origination fee
• Upgrade: 1.85% to 9.99% origination fee
• LightStream: 0% (no origination fee)
• Marcus by Goldman Sachs: 0% (no origination fee)
• Nationwide Loans: 0% (no origination fee, no prepayment penalty, no application fee)

How to spot origination fees in an offer

Look for these line items in the disclosure: origination fee, finance charge, processing fee, administrative fee, or sometimes upfront fee. Compare the amount financed (what you receive) against the loan amount (what you borrow). If they differ, that gap is the origination fee.

No origination fee on any of our loans. See our rates and terms.