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Glossary term

Origination Fee

Definition

An origination fee is what some lenders charge to set up and process a new loan.

Technical definition

An origination fee is a charge assessed by a lender for processing and underwriting a new loan, often expressed as a percentage of the principal.

Why it matters

Origination fees add to the cost of borrowing and factor into APR, so they're worth comparing across offers.

Example

A fee charged at closing to cover processing the loan would be an origination fee.

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