About the Loan Origination Fee Calculator
An origination fee is a one-time charge a lender takes for processing a loan, usually quoted as a percentage of the loan amount. Personal loan lenders commonly charge somewhere between 0% and about 10%, and mortgages and business loans have their own versions. This calculator shows the fee in dollars, the money you actually receive, your monthly payment and the APR once the fee is counted.
How the fee is collected changes the math. Most personal lenders deduct it from the proceeds, so a $20,000 loan with a 5% fee deposits only $19,000 while you repay the full $20,000. Some lenders add the fee to the balance instead, and others let you pay it in cash at closing. Pick the option that matches your offer.
If you need a specific amount in hand, enter it as your target and the calculator grosses up the loan: the amount to request so that, after the fee is deducted, you still receive what you need. That is the answer to “how much should I borrow to get $X after fees?” APR is solved from the cash you receive and the payments you make, following the same principle as the APR on a Truth in Lending disclosure.
With the default inputs, the origination fee is $1,000.00. Change any value above to recalculate instantly.
How to use the loan origination fee calculator
- 1Enter the loan amount and the origination fee percentage from your offer.
- 2Add any flat fee and choose how the fee is collected.
- 3Enter the interest rate and the term in months.
- 4Enter the cash you need to see how much to request after a deducted fee.
- 5Compare the APR and total cost with offers that charge no fee.
Formula and method
The fee is the loan amount L times the fee rate f, plus any flat fee. If it is deducted, you receive L − Fee but repay L; if it is added to the balance, you receive L and repay L + Fee; if you pay it in cash, you repay L but your net cash is still L − Fee. The monthly payment is the standard amortizing payment on the balance you repay.
APR is the monthly rate i that makes the present value of all payments equal to the cash you actually receive, multiplied by 12 — the actuarial method used for Truth in Lending APRs. The gross-up divides the cash you need (plus any flat fee) by one minus the fee rate, because the percentage fee is charged on the larger, grossed-up amount.
- L
- Loan amount requested
- f
- Origination fee rate (as a decimal)
- PMT
- Monthly payment
- i
- Monthly rate solved for APR
Worked examples
$20,000 personal loan, 5% fee deducted, 12% for 36 months
A 5% fee on $20,000 is $1,000, so you receive $19,000 but repay $20,000 at $664.29 a month. Solving for the rate that turns $19,000 into 36 payments of $664.29 gives an APR of about 15.6%. To actually receive $20,000 you would need to borrow $20,000 ÷ 0.95 = $21,052.63.
Same loan with the fee added to the balance
Rolling the $1,000 fee into the loan means you receive the full $20,000 but repay $21,000 at $697.50 a month. The APR is about 15.4%, slightly lower than when the fee is deducted because the fee itself is spread over the term.
$10,000 loan, 8% fee plus $50, 18% for 60 months
The fee is $800 plus $50, so $9,150 is deposited while you repay $10,000 at $253.93 a month — an APR of about 22.2%. To net $9,000 you would request ($9,000 + $50) ÷ 0.92 = $9,836.96.
Frequently asked questions
What is a typical loan origination fee?+
Personal loan origination fees typically range from 0% to around 10% of the loan, depending on the lender and your credit. Mortgage lenders often charge around 0.5% to 1% of the loan, and SBA and other business loans have their own guarantee and packaging fees.
Is the origination fee included in the APR?+
Yes. Under the Truth in Lending Act, prepaid finance charges such as origination fees are included in the APR, which is why a loan with a fee has an APR higher than its interest rate. Comparing APRs is the easiest way to compare offers with different fees.
Can I avoid or negotiate an origination fee?+
Many lenders, including some online lenders and credit unions, charge no origination fee. With strong credit you can sometimes negotiate the fee or trade it for a slightly higher rate. Always compare the APR and the total cost over the time you expect to keep the loan.
How do I get the amount I need if the fee is deducted?+
Divide the cash you need by one minus the fee rate. For example, to receive $10,000 with a 6% fee you would borrow $10,000 ÷ 0.94 = $10,638.30. Check that the lender allows the larger amount and that the payment still fits your budget.
Is a loan origination fee tax-deductible?+
For personal loans, usually not. On a mortgage, points paid to obtain the loan may be deductible as mortgage interest if IRS conditions are met, and business loan fees are generally deductible over the life of the loan. Check IRS guidance or a tax professional.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.