What an origination fee is
An origination fee is a one-time fee some lenders charge to process a loan, usually a percentage of the amount borrowed. On some Loanify loans it ranges from 0% to 8%, and when it applies it's always included in your APR and shown on your offer before you sign. See Loanify rates and fees.
How it's deducted
Most lenders take the fee out of the loan before it's deposited. Borrow $2,000 with a 5% fee and you receive $1,900, while you repay the full $2,000 plus interest.
How it changes your APR
Because you pay interest on money you didn't receive, the fee raises the true cost. A $2,000 loan at a 19.99% interest rate over 12 months with a 5% fee has an APR of about 30%. This is why APR, not the interest rate alone, is the number to compare. More in understanding APR.
When comparing offers, look at two lines: the amount you'll actually receive and the total of payments. Together they show what the fee really costs you.Lending tip from the Loanify Editorial Team
Borrowing the right amount when a fee applies
If you need a specific amount in hand, divide it by (1 minus the fee rate). To receive $1,000 with a 5% fee, you'd borrow about $1,053. The Loanify loan calculator shows the amount you'd receive when you enter a fee.
Frequently asked questions
Does every Loanify loan have an origination fee?
No. Some loans have none; when a fee applies, it's shown on your offer and included in your APR.
Is an origination fee refundable if I pay early?
Generally no. It's a one-time processing fee, but paying early still saves interest.
More guides
Understanding APR on small loans
Choosing your Loanify loan term: 3 to 36 months
Loanify loan requirements: what lenders check and why
About the Loanify Editorial Team
Our guides are researched, written and fact-checked against federal lending rules, CFPB guidance and current loan terms. Every payment example is calculated with the standard amortization formula. Read our editorial policy.