pricing
Origination Fee
An origination fee is a one-time charge, usually 1% to 5% of the funded amount, deducted at closing to cover underwriting and disbursement.
Last updated Reviewed by ICG Funding
Definition
What it means.
The origination fee is taken from the gross loan amount before funds are wired. A $100,000 loan with a 3% origination fee nets $97,000 to the borrower while the full $100,000 accrues interest and must be repaid.
Origination fees are the single largest driver of APR divergence between otherwise similar products. A 12% interest loan with a 5% origination fee paid over 12 months has an effective APR near 20%. Ask every funder for the APR inclusive of origination, not just the headline interest rate.
Now what?
Get an offer that accounts for origination fee.
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