Personal Loan Fees: What Each One Means
Fees and charges are often added to the total cost of a personal installment loan. Knowing their names makes them easier to spot in your loan documents.
Key takeaways
- Fees named by the CFPB for personal installment loans include origination, documentation and late fees.
- Credit insurance and disability insurance are generally optional.
- The loan disclosures and documents are where you confirm which fees apply to you.
Fees you may see
- Origination fee: a charge made when the loan is made. The CFPB counts origination charges among the fees included in the APR.
- Documentation fee: a fee to process the paperwork.
- Late fee: charged when a payment is not made on time. Late payment charges are part of the required disclosures.
- Non-filing insurance: may appear on loans secured by collateral.
Which of these apply, and how much they are, depends on the lender and the loan. This site does not list fee amounts because they vary and change.
Add-ons that are generally optional
Lenders may offer credit insurance or disability insurance alongside a loan. The CFPB describes these as generally optional. If one is included in your paperwork, you can ask whether it is required and what the loan costs without it.
Sources: [1]
What about paying the loan off early?
A prepayment penalty is a fee some lenders charge when a loan is paid off early. The CFPB explains the term in the context of mortgages. For an installment loan, the place to look is the prepayment section of your Truth in Lending disclosure, which states the terms that apply if you pay early.
We have not verified how common prepayment penalties are on personal loans, so this article makes no claim about that.
Where fees show up
Check the required loan disclosures and the loan documents your lender provides to understand any fees you may be liable for. Fees charged by the lender also feed into the APR, which is why the APR is a more complete comparison number than the interest rate.
Frequently asked questions
Do all personal loans have an origination fee?
No single rule applies. The CFPB lists an origination fee as one of the fees a personal installment loan may have. Your loan disclosures show whether one applies to your loan.
Is credit insurance required to get a loan?
The CFPB describes credit insurance and disability insurance on personal installment loans as generally optional. Ask your lender directly if it appears in your documents.
Related guides
Sources
- Consumer Financial Protection Bureau. Do personal installment loans have fees?
- Consumer Financial Protection Bureau — Regulation Z (Truth in Lending), 12 CFR 1026.18. § 1026.18 Content of disclosures (closed-end credit)
- Consumer Financial Protection Bureau. What is a prepayment penalty?
- Consumer Financial Protection Bureau. What is the difference between a loan interest rate and the APR?