How does an origination fee affect the true APR?

A 2% origination fee on a $20,000 personal loan at 10% APR for 5 years increases the true APR to approximately 11.7%. The fee is paid upfront but reduces your net loan proceeds from $20,000 to $19,600.

Are origination fees negotiable?

Often yes — especially for large loans or with competing offers in hand. Some lenders waive origination fees for borrowers with excellent credit. Comparing APR (which includes fees) is essential.

What other fees affect the true cost of borrowing?

Application fees, underwriting fees, processing fees, wire transfer fees, and prepayment penalties all increase the true cost. The APR disclosure must include most of these under TILA.

Loan Origination Fee True Cost Calculator

Calculate the true APR impact of loan origination fees. Fees increase the effective interest rate and reduce the net loan proceeds available to the borrower.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate the true APR impact of loan origination fees. Fees increase the effective interest rate and reduce the net loan proceeds available to the borrower. Use the origination fee cost result to inform your calculation.

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Loan Origination Fee True Cost Calculator

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Frequently Asked Questions

How does an origination fee affect the true APR?

Are origination fees negotiable?

What other fees affect the true cost of borrowing?