Glossary
Origination fee
An origination fee is a one-time charge for making a loan, often 1% to 10% of the amount on personal loans, usually deducted from the money you receive and included in the loan's APR.
Because the fee is subtracted up front, you receive less than you borrow, and the APR is higher than the interest rate. Compare loans by APR, and borrow a little more if you need the full amount after the fee.
Work it out
Related terms
- APR (annual percentage rate)The yearly cost of borrowing as a percentage: on a credit card, the interest rate on balances you carry; on a loan, the interest rate plus certain fees.
- AmortizationPaying off a loan in equal installments that each cover that month's interest and part of the principal, so early payments are mostly interest and later ones mostly principal.
Sources: CFPB: Regulation Z, 12 CFR 1026.4