Loan Origination Fee Calculator
Calculate a loan origination fee, the cash you actually receive, the monthly payment and the APR including the fee — whether the fee is deducted from the loan, financed or paid upfront.
How it works
Fee = loan × fee % · deducted: you receive loan − fee, owe the loan · financed: you receive the loan, owe loan + fee · payment = B × i ÷ (1 − (1 + i)⁻ⁿ) · APR: solve net cash = payment × [1 − (1 + j)⁻ⁿ] ÷ j, APR = 12 × j · gross-up = wanted cash ÷ (1 − fee %)
An origination fee (opening commission) is a one-time charge for processing a loan, usually 1% to 8% of the amount on personal loans and 0.5% to 1% on mortgages. It does not change the interest rate, but it shrinks the money you really get — or raises what you owe — so the true cost is the APR, the rate at which your payments repay only the cash you received. That is the same internal-rate-of-return method used for the US APR (Regulation Z), the TAE in Spain and the CAT in Mexico.
Worked example
A 10,000 loan with a 5% origination fee deducted from the proceeds is a fee of 500.00, so 9,500 reaches your account while you still repay 10,000 at 10% over 36 months: 322.67 a month and 1,616.19 of interest. Counting the fee, borrowing costs 2,116.19 and the APR is 13.56%, not 10%. To receive the full 10,000 in hand you would need to borrow 10,000 ÷ 0.95 = 10,526.32.
Sources: CFPB — Regulation Z §1026.4, finance charge (includes points and loan fees) · Wikipedia — Annual percentage rate
Frequently asked questions
Is an origination fee worth paying?
Compare APRs, not interest rates. A loan with a fee and a lower rate can beat a no-fee loan if you keep it for the full term; if you will repay early, the no-fee loan is often cheaper because the fee is spread over fewer months.
Why is the APR higher than the interest rate?
Because you pay interest on the full balance while receiving less cash (or you owe the fee on top). Spreading the fee over the term raises the effective annual cost.
How much should I borrow to get a specific amount in hand?
If the fee is deducted, divide the cash you need by (1 − fee %). To net 10,000 with a 5% fee you need to borrow 10,526.32.
Can I negotiate the origination fee?
Often yes — especially with good credit, an existing relationship or a competing offer. Ask for the fee to be reduced or waived in exchange for a slightly higher rate, and compare the APRs.
Related calculators
Estimates for education and planning, not financial advice. Lenders’ contracts, fees, day-count and rounding rules differ — check the official cost disclosure (APR / TAE / CAT) and your loan agreement before deciding.