When applying for a personal loan, most people pay close attention to the interest rate a lender offers. But there are a number of fees that can add substantially to the total cost of borrowing.
Learn about the most common fees personal loan lenders charge borrowers and how to avoid them.
Application fees
Some lenders charge a fee just to process your loan application, whether you're approved or not.
How to avoid an application fee: Application fees aren't common anymore, but it's worth asking while you're still comparing offers. Neither Upstart nor OneMain Financial charge an application fee and borrowers can get prequalified, giving you an estimate of the interest rate and loan amount you may be offered.
We like that Upstart considers factors besides credit score, including education, income and employment history. However, co-signers aren't accepted.
- Accept applicants with bad or no credit
- Minimum APR is lower than many competitors'
- Approves personal loans up to $75,000
- Most loans are funded the next business day
- Origination fee of 0% to 10%
- Doesn't allow co-signers or co-borrowers
We like that OneMain accepts borrowers with bad credit and offers secured loans and fast funding. However, its minimum APR is on the high side and the $30,000 financing maximum may be too low if you need a larger loan.
- Approves applicants with bad/fair credit
- Same-day funding available
- Can apply with collateral
- Co-applicants allowed
- High origination fee
- High minimum interest rate
- No autopay discount
- Co-signers not allowed
*You must complete a loan application and continue to meet any criteria used to select you for a loan offer. Not all applicants are approved. Loan approval and actual loan terms depend on applicant's state of residence and ability to meet OneMain Financial credit standards such as a responsible credit history, sufficient income after monthly expenses, and if applicable, availability of eligible collateral.
Not all approved applicants qualify for larger loan amounts, lower APRs, or the most favorable loan terms. For example, larger loan amounts typically require a first lien on a motor vehicle that is no more than ten years old, meets our value requirements, and is titled in applicant's name with valid insurance. APRs are generally higher on loans not secured by a vehicle.
Example Loan: A $6,000 loan with a 24.99% APR that is repayable in 60 monthly installments would have monthly payments of $176.07.
OneMain charges origination fees allowed by law. Depending on the state where the loan is opened, the origination fee may be either a flat amount or a percentage of the loan amount. Flat fees vary by state, ranging from $25 to $500. Percentage-based fees vary by state, ranging from 1% to 10% of the loan amount subject to certain state limits on the fee amount.
For information about these fees and minimum and maximum loan sizes available in certain states, visit omf.com/loanfees.
Current OneMain Customers: Loan offers presented to a consumer assume the individual has no active loan with OneMain or one of its affiliates. If a customer applies for a new loan offer, a OneMain representative will discuss available options.
Active-duty military, their spouse or dependents covered by the Military Lending Act (MLA) may not pledge any vehicle as collateral. If you are covered by the MLA, you are not eligible for secured loans.Loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB's Regulation Z such as college, university or vocational expense; for any business or commercial purpose; to purchase cryptocurrency assets, securities, derivatives or other speculative investments; or for gambling or illegal purposes.
Time to Fund Loans: Funding within one hour after loan closing through SpeedFunds® must be disbursed to a bank-issued debit card. Disbursement by check or ACH may take up to 1-2 business days after closing.
Origination fees
An origination fee is a one-time upfront charge that lenders usually subtract from the loan total to pay for administration and processing costs.
While it's sometimes a flat dollar amount, an origination fee is usually a percentage of the loan, anywhere from 1% to 10%. That means if you borrow $10,000 from a bank with an origination fee, you may only see $9,000 deposited in your account. You'd still have to pay back the full $10,000, however, plus interest.
How to avoid an origination fee: Discover is among the lenders that don't charge origination fees for personal loans, and it can make funds available as soon as the next business day after signing.
No origination fees, no early payoff fees
- No origination fees, no early payoff fees
- Same-day decision (in most cases)
- Option to pay creditors directly
- 7 different payment options from mailing a check to pay by phone or app
- No autopay discount
- No cosigners or joint applications
Known for its competitive APRs, PenFed Credit Union is another top pick for lenders with no origination fee. It offers loans ranging from $600 up to $50,000 and lets applicants apply with a co-borrower to improve their chances of approval.
PenFed is worth considering if you have good-to-excellent credit and want a straightforward personal loan with competitive rates and few fees. We like that you don't have to be a PenFed member to apply — you can join during the application process.
- Approves loans as small as $600.
- Membership available with a $5 deposit in a savings account.
- Can pick up a physical check at a branch.
- Can apply with a co-borrower.
- Maximum loan amount is $50,000.
- Generally need good to excellent credit.
- Most branches are in D.C., Maryland and Virginia.
Late fees
If you fail to make a loan payment by your due date, you may be charged a late fee, which can be a flat amount or a percentage of the amount due.
Some lenders offer a grace period of one to five days to allow for bank processing.
How to avoid a late fee: Not all lenders charge late fees — SoFi and LightStream are among those that don't. In addition, LightStream offers a 0.50% interest rate discount on eligible loans when you set up automatic payments — so you can save money and never forget to make a payment. SoFi has a 0.25% autopay reduction.
We like that SoFi has high loan caps and doesn't charge any origination fee, so borrowers get the full amount funded. The credit requirements can be stringent, however, and interest rates for weaker applicants are on the higher side.
- Loans approved for up to $100,000
- No origination fee or late fee
- Next-day funding available
- Accepts co-borrowers
- Minimum loan amount is $5,000
- High APR for fair/low credit
Fixed rates from 8.74% APR to 35.49% APR. APR reflect the 0.25% autopay interest rate discount and a 0.25% SoFi Plus interest rate discount. SoFi Platform personal loans are made either by SoFi Bank, N.A. or, Cross River Bank, a New Jersey State Chartered Commercial Bank, operating from its Delaware branch, Member FDIC, Equal Housing Lender. SoFi may receive compensation if you take out a loan originated by Cross River Bank. These rate ranges are current as of 02/23/26 and are subject to change without notice. Not all rates and amounts available in all states. See SoFi Personal Loan eligibility details at https://www.sofi.com/eligibility-criteria/#eligibility-personal. Not all applicants qualify for the lowest rate. Lowest rates reserved for the most creditworthy borrowers. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors.
We like that LightStream offers competitive APRs, no late or origination fees and long loan term options. But you can't prequalify and the loan minimum may be too high if you only need to borrow a small amount.
- Same-day funding available.
- Loan amounts up to $100,000.
- No origination fee or late fee.
- The minimum loan amount is $5,000.
- Prequalification not available.
- No option to pay your creditors directly.
Returned payment fees
While a late fee is assessed if you don't make a payment, you can also be charged if you attempt an ACH transfer that is declined or send a paper check that bounces.
Returned payment fees can range from $25 to $40. Your own bank may also charge you an nonsufficient funds fee (NSF) or overdraft charge if you don't have enough money in your account.
How to avoid a returned payment fee: LightStream and Earnest are among the lenders that do not charge returned payment fees if you don't have enough money in your account to complete the transaction.
Earnest is a good option for borrowers with fair to good credit. There are no mandatory upfront fees, although Earnest offers an optional origination fee of 1% to 8% in exchange for a lower interest rate. You may also qualify for a lower APR by continuing to make on-time loan payments.
If you need to add a co-borrower or secure your loan with collateral, however, Earnest doesn't allow either option.
- No origination, late or returned payment fees
- Rate Drop Reward: Eligible borrowers can lower their rate by up to 0.75% with on-time payments
- Borrowers can skip one payment a year
- Funds available in as little as 24 hours
- Optional origination fee of up to 8% required for lowest advertised rate.
- Doesn't accept joint applications.
- No deposit accounts, mortgages, credit cards or other financial products
Prepayment penalties
Lenders make money by charging interest on loans and count on earning it for the full term of your loan. It's much less common these days, but some lenders attempt to discourage borrowers from paying off their loan early (and depriving them of months of interest) by charging a prepayment penalty.
None of the lenders on CNBC Select's list of the best personal loans charge a prepayment penalty. So if your finances allow, you can get out of debt faster.
FAQs
What is an origination fee?
An origination fee is a one-time upfront charge for processing and issuing a personal loan. It's typically a percentage of the loan amount and may be deducted from your loan proceeds or added to your balance.
How do loan fees affect APRs?
Tthe APR (annual percentage rate) incorporates both the interest rate and certain upfront finance charges. So if a lender charges an origination fee, for example, it'll raise the APR. That's why it's better to look at APRs rather than just advertised interest rates when shopping for a loan. It will give you a clearer picture of the full cost of borrowing.
Do credit unions have fewer loan fees?
Yes, because they're nonprofits that return profits to members rather than shareholders, credit unions typically have lower and fewer fees associated with personal loans.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every loan article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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