What are origination fees for personal loans?

An origination fee is an upfront fee charged by the lender as compensation for processing a borrower's loan application. Typically, this fee is used to offset the expenses of a new borrower's underwriting and verification. It's generally around 0.5% to 1% of the original loan amount, but some lenders may charge as high as 8%. Not all lenders charge these fees, and many that do are open to negotiable arrangements.

How can I get a loan with no origination fees?

If you choose a lender that charges origination fees and you want them waived, many lenders are open to negotiations. Origination fees are internal charges, so lenders have the authority to make changes to terms related to them. If you have a high credit score or a significant down payment, they're more likely to waive these fees since you're considered less likely to default on your loan. Waiving this feel can, however, translate to paying a higher interest rate over the life of the loan.

Will a personal loan hurt my credit score?

A personal loan can hurt your credit score in a few ways. For example, missing a payment has a significant impact on your credit. If your lender conducts a hard credit inquiry during the approval process, that can also affect your credit score. Additionally, taking on more debt can negatively impact your FICO Score.

What is the average APR of a personal loan with no origination fees?

To reiterate, there are bigger factors that affect the APR of your personal loans, but lenders offering no origination fees may actually just be rolling that cost into the principal; in this case, the origination fee is added to the interest of the loan. According to the <a href="https://www.federalreserve.gov/releases/g19/current/default.htm" target="_blank">Federal Reserve</a>, the national average interest rate as of the last quarter of 2021 was 9.09%.

What’s a fair interest rate for a personal loan with no origination fees?

A personal loan’s interest rate depends on several factors such as credit score, income and repayment period. Origination fees could potentially increase your interest rate if none is charged upfront because lenders may want to make up for the cost of processing your loan. A fair interest rate varies depending on your credit score; it’s typically between 6%–9% for individuals with fair to good credit scores.

Best Personal Loans With No Origination Fees in October 2023

When applying for a personal loan, it’s essential to consider the fees charged by each prospective lender. One of these is the origination fee, a one-time payment imposed by the lender for processing your loan. Not all lenders charge this fee. While you may pay less in upfront closing expenses with a no-origination-fee personal loan, it could mean paying more in interest over the life of the loan.

WHAT WE’RE GEEKING OUT ON

The Best Overall Personal Loans With No Origination Fees
How to Choose the Right Personal Loan for You
Calculate Your Monthly Payment Using Personal Loan Calculator
Frequently Asked Questions About Personal Loans with No Origination Fees

Best Personal Loans With No Origination Fees for 2023

Personal loan origination fees are one-time charges you may have to pay when taking out a loan. These fees are usually around 1%–8% of the original loan amount and cover the cost of processing your loan. Online lenders are more likely to levy origination fees than direct lenders, such as banks and credit unions.

To help you find the best personal loans with no origination fees, MoneyGeek reviewed over 30 personal loan lenders using 35+ individual data points across five key categories. The factors we assessed include APR ranges, available loan amounts, minimum credit scores, application fees and disbursement times. We also considered customer satisfaction, overall experience quality and business ratings.

MoneyGeek’s Top Pick for No-Origination-Fee Loans: LightStream

LightStream
- 4.49% to 20.49%APR Range
- 660Minimum Credit Score
- $5,000 to $100,000Loan Amount Range
- 24 to 84 monthsRepayment Terms
- Same DayTime to Receive Funds
Our top provider of best personal loans with no origination fees is LightStream. This lender doesn't charge late fees or penalties for early payments, and its annual percentage rate (APR) goes as low as 4.49%. Furthermore, if you apply for a loan on a banking business day and get approved, you may be able to get the fund the same day. Not to mention, LightStream is rated A+ by the Better Business Bureau.
However, this lender does have a few drawbacks. For instance, individuals with a credit score of less than 660 are not eligible for a loan. LightStream also limits how you may use the money you borrow. Specifically, you can't use the company’s loans for college or post-secondary education expenditures, stock and bond purchases or business-related expenses.
Pros
Same-day funding release
No late fee
No prepayment penalty
$100,000 loan limit
Joint loans available

Cons
Hard credit pull required
No consigners allowed
People with new or no credit don’t qualify
APR Range: 4.49%–20.49%
Minimum/Maximum Loan Amount: $5,000–$100,000
Minimum Credit Requirements: 660
Repayment Terms: 24–84 months
Time to Receive Funds: Same day

MoneyGeek’s Runner-Up: Discover

Discover
- 5.99% to 24.99%APR Range
- 720Minimum Credit Score
- $2,500 to $35,000Loan Amount Range
- 36 to 84 monthsRepayment Terms
- Next DayTime to Receive Funds
In addition to being our runner-up for loans without origination fees, we rated Discover as our best personal loan provider for those with good to excellent credit. This lender requires a minimum 720 credit score. Despite its high credit score requirement, Discover provides a positive customer service experience, as reflected by its A+ rating with the BBB. Additionally, the lender doesn’t have a prepayment penalty.
On the downside, Discover may not be an ideal fit for those who have low credit scores or have never opened a credit account. We also don’t recommend Discover for anyone with low income or the need to borrow more than $35,000.
Pros
Rated A+ by the Better Business Bureau (BBB)
Conducts soft credit check that won’t affect credit history
Discloses rates publicly on its website
No prepayment penalty

Cons
$35,000 funding limit
High minimum credit score requirement (720)
Potentially high interest rates
APR Range: 5.99%–24.99%
Minimum/Maximum Loan Amount: $2,500–$35,000
Minimum Credit Requirements: 720
Repayment Terms: 36–84 months
Time to Receive Funds: Next day

Personal Loan Options for Those Who Want No or Low Origination Fees

Lender	Minimum Credit Score	Loan Amounts	APR Range	Ready To Apply?
Truist	None	$3.5K to $50K	8.14% to 18.99%	Learn More
American Express	660	$3.5K to $40K	4.93% to 19.97%	Learn More
SoFi	680	$5K to $100K	5.74% to 20.28%	Learn More
Payoff	550	$5K to $40K	5.99% to 24.99%	Learn More

Where to Start: Choosing the Best No-Origination-Fee Personal Loan

Personal loans can be a cost-effective alternative to getting a credit card, allowing you to fund major expenditures like relocation, home improvement, debt consolidation, big purchases and vacations while saving money on interest. However, it’s crucial that you only take out a loan you can pay back without accumulating too much interest.

Considering factors like your credit score, income and current debt is a crucial first step. With these in mind, you can choose the best lender, loan amount and repayment terms for your specific needs and situation. MoneyGeek outlined other key steps you can take to select the right lender and loan for you.

Ask Yourself the Important Questions

It can be difficult to parse through all the factors involved in getting a personal loan. That’s why we suggest you take a step back and ask yourself the following questions to get your bases covered:

How much do you need in funds? Depending on what you need the loan for, you might need more than $50,000 or even $100,000. It’s important to find lenders that can fulfill the amount you need.
What’s your credit score? This information can be a limiting factor because each lender has its own minimum credit score requirements. If feasible, determine if you can save more in the long run if you decide to improve your credit standing and then apply for a loan from a lender with a high credit requirement.
Can you afford the monthly payment? Make sure to include your current debt, bills and other expenses when calculating your ability to pay monthly. Missing a single payment can hurt your credit score significantly.
How much debt do you already have? Evaluate if you can afford to add another monthly payment to your current debt. If you already have a considerable amount owed in your account, your FICO score might suffer a drop if you take out another loan.

Do Your Research

Don't underestimate the power of data collection; bear in mind that you'll be responsible for repayment for at least two to six years. Make a point of researching topics that could have a long-term influence on you. For example, you might wish to avoid lenders who do a thorough credit check because your credit score may suffer as a result. The same goes for lenders that place restrictions on how you may utilize your loan; in this case, it’s crucial that you double-check that you can use the money for the purpose you intended.

MoneyGeek's guide is full of valuable information and suggestions for the best lenders for various scenarios, but our recommendations aren't perfect. You may benefit from looking into something we didn't cover. By conducting your own research, you can find additional suitable lenders for your needs.

Wait

Once you've gathered all of the facts you'll need, take a deep breath. Waiting a day or two before revisiting the prospect of taking out a loan allows you to think about it more rationally. A personal loan is a significant financial investment that can take years to pay off. Because of its long-term impact, carefully evaluating if taking out a personal loan is the best choice for you is essential.

Read the Fine Print

Once you've decided on a lender, review possible fees, including origination fees, prepayment penalties and late fees. Paying attention to these seemingly small details can potentially save you a significant amount of money in the long run.

Apply

After going through these steps, the only thing left to do is apply for your loan. Be sure only to apply once you've chosen a lender you feel comfortable with and thoroughly understand the application conditions.

At this point, the lender may request specific documents and information from you, including identification, proof of income and evidence of residency. Some lenders will allow you to apply online. However, if you can, calling or visiting the lender is also a useful alternative, especially if you have questions.

Key Takeaways

Ask Yourself the Important Questions: Determine how much you need in funds and how much you can afford to pay, and evaluate your current credit score and existing debts.

Do Your Research: It’s beneficial to do additional research, particularly on areas that our guide hasn’t covered.

Wait: Take a step back before applying to reflect on whether or not getting a personal loan is the best course of action for you.

Read the Fine Print: Make sure you understand all the details of your loan contract before applying.

Apply: Prepare identification documents like valid IDs and proof of income. Apply online or in-person based on what’s available and what you prefer.

Calculate Your Monthly Payment

The typical loan repayment period often spans several years. Knowing your future monthly payment can help you determine how well you’ll be able to pay your new loan off, given your current financial situation. It can also help you decide if you need to adjust some loan parameters, like payment terms and loan amount.

Month	Payment	Principal	Interest	Balance

Frequently Asked Questions About No-Origination-Fee Loans

Your personal needs, along with other factors — such as credit, loan amount and payback periods — determine the best personal loan lender for you. MoneyGeek compiled some of the most frequently asked questions about loans with no origination fees to help you choose a loan and lender.

Methodology

We reviewed over 30 personal loan lenders using 35+ individual data points across five key categories: loan affordability, accessibility, consumer friendliness, customer service, flexibility and lender transparency.

We considered several individual data points that we feel carry the most weight when choosing a personal loan lender within each ranking criteria category. These factors include APR ranges, available loan amount, minimum credit score, minimum income amount, application fees and disbursement time.

Here at MoneyGeek, we value you — the consumer — so we also factor in lenders’ customer support, business ratings and additional features that could make your experience easier and more accessible – like prequalification, payment options and mobile apps.

After careful consideration and calculation, our picks are decided and chosen with your best interest in mind. Our personal loan recommendations and expert tips can help you make the best decision when choosing a lender that meets your needs.

MoneyGeek’s Picks for 2022

Best Personal Loans With No Origination Fees in October 2023

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Best Personal Loans With No Origination Fees for 2023

MoneyGeek’s Top Pick for No-Origination-Fee Loans: LightStream

MoneyGeek’s Runner-Up: Discover

Personal Loan Options for Those Who Want No or Low Origination Fees