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3 Best Personal Loans With No Origination Fee 2020

Steve NicastroSeptember 16, 2020

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No-origination-fee personal loans appeal to borrowers who don't want extra costs. Compare the best personal loans without this fee.

Personal loans with no origination fee reduce the overall cost of the loan and give borrowers the full loan amount they requested. When comparing personal loans, it’s a good idea to choose one with no origination fee if it means a lower-cost loan.

Origination fees on personal loans are similar to those on mortgages: They cover the lender’s cost of processing the loan and are calculated as a percentage of the loan, typically between 1% and 8%. Most often, lenders deduct the upfront fee from the loan proceeds; it can also be rolled into the balance.

A $20,000 personal loan with a 5% origination fee ($1,000), for example, can mean you get $19,000, or an additional $1,000 on the balance.

“You should always look at the all-in cost of the loan, but as a general rule of thumb, you are better off not paying origination fees,” says David Green, chief product officer at online lender Earnest.

Summary of Best Personal Loans With No Origination Fee 2020

Our pick for

Overall personal loan with no origination fee

Lightstream

on LightStream's website

LightStream

Lightstream

Min. Credit Score

660

Est. APR

5.49 - 20.49%

Loan Amount

$5,000 - $100,000

on LightStream's website


Min. Credit Score

660

Key facts

LightStream stands out for having no origination or other fees and low rates. It requires good credit, but you can add a co-applicant to increase your approval chances.

LightStream’s loan amounts go up to $100,000 and repayment terms can be extended up to 12 years when used for financing home improvements.

Pros

  • No fees.

  • Rate discount for autopay.

  • Low starting rates.

Cons

  • Does not offer pre-qualification on its website.

  • Requires several years of credit history.

Qualifications

  • Minimum credit score of 660.

  • Enough income to pay existing debts and a new LightStream loan.

  • Maximum debt-to-income ratio varies depending on existing assets and the reason for the loan.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and may vary based on loan purpose, length of loan, loan amount, credit history and payment method (AutoPay or Invoice). Rate quote includes AutoPay discount. AutoPay discount is only available when selected prior to loan funding. To obtain a loan, you must complete an application on LightStream.com, which may affect your credit score. You may be required to verify income, identity and other stated application information. Payment example: Monthly payments for a $5,000 loan at 12.8% APR with a term of 3 years would result in 36 monthly payments of $168. Some additional conditions and limitations apply. Advertised rates and terms are subject to change without notice. SunTrust now Truist is an Equal Housing Lender. © 2020 Truist Financial Corporation. SunTrust®, Truist, LightStream®, the LightStream logo, and the SunTrust logo are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners. Lending services provided by SunTrust now Truist Bank.
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Our pick for

No-fee loans for debt consolidation

Marcus by Goldman Sachs

on Goldman Sachs's website

Marcus by Goldman Sachs

Marcus by Goldman Sachs

Min. Credit Score

680

Est. APR

6.99 - 19.99%

Loan Amount

$3,500 - $40,000

on Goldman Sachs's website


Min. Credit Score

680

Key facts

Marcus does not charge any fees, whether for origination, late payments, overdrafts or prepayment. Marcus also offers direct payment to creditors, making it an option for debt consolidation.

Pros

  • No fees.

  • Flexible payment options.

  • Directly pays creditors for debt consolidation loans.

  • Rate discount with autopay.

Cons

  • No option to include co-signer.

  • Reports payments to one of the three major credit bureaus.

Qualifications

  • At least 18 years old (19 in Alabama; 21 in Mississippi and Puerto Rico).

  • Valid U.S. bank account, Social Security number or tax ID.

  • 680+ credit score.

  • For debt consolidation loans, you may be required to send part of the loan directly to your creditors.

Available Term Lengths

3 to 6 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Your loan terms are not guaranteed and are subject to our verification of your identity and credit information. To obtain a loan, you must submit additional documentation including an application that may affect your credit score. The availability of a loan offer and the terms of your actual offer will vary due to a number of factors, including your loan purpose and our evaluation of your creditworthiness. Rates will vary based on many factors, such as your creditworthiness (for example, credit score and credit history) and the length of your loan (for example, rates for 36 month loans are generally lower than rates for 72 month loans). Your maximum loan amount may vary depending on your loan purpose, income and creditworthiness. Your verifiable income must support your ability to repay your loan. Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and all loans are issued by Goldman Sachs Bank USA, Salt Lake City Branch. Applications are subject to additional terms and conditions.
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Our pick for

No-fee loans for home improvements

SoFi

on SoFi's website

SoFi

Min. Credit Score

680

Est. APR

5.99 - 18.53%

Loan Amount

$5,000 - $100,000

on SoFi's website


Min. Credit Score

680

Key facts

SoFi charges no fees and offers high loan amounts up to $100,000 that can cover larger home improvement projects, and its loan terms can stretch to seven years.

Pros

  • Soft credit check with pre-qualify.

  • Flexible payment options.

  • Offers member perks.

Cons

  • Does not offer direct payment to creditors with debt consolidation loans.

  • Does not offer refinance options.

Qualifications

  • Minimum credit score: 680, but typically 700 or higher.

  • Minimum annual income: None; borrowers' average is over $100,000.

Available Term Lengths

2 to 7 years

Fees

  • Origination fee: None.

  • Late fee: None.

Disclaimer

Fixed rates from 5.99% APR to 18.53% APR (with AutoPay). SoFi rate ranges are current as of September 18, 2020 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, income, and other factors. See APR examples and terms. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
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Bank loans with no origination fees

Most banks offer personal loans with no origination fees. You might consider a bank loan if your bank offers lower rates or other benefits for existing customers. On the other hand, banks typically do not pre-qualify borrowers with a soft credit pull, so applying triggers a hard inquiry that can temporarily hurt your credit score.

Here are four banks that charge no origination fees on personal loans:

  • PNC offers a quarter-point rate discount for customers who sign up for automatic payments from a PNC checking account. The lender also accepts co-applicants.

  • Discover provides free access to your credit score and debt management tools. It also offers low rates and direct payment to creditors for debt consolidation.

  • American Express offers personal loans to existing cardholders who receive preapproval. You can use the loan to pay off credit cards at other banks.

  • Wells Fargo loans are a good fit if you’re an existing customer or live near a Wells Fargo branch, as new customers must apply in person.

Other personal loan fees and charges

Here are other cost-related considerations when comparing personal loans:

Annual percentage rate: APR is the sum of the loan’s interest rate plus all upfront costs, including origination fees. Lenders are required to disclose APR and fees under the Truth in Lending Act. Use APRs to compare the true annual borrowing costs between lenders.

Late fee: This common fee is charged when you’ve missed a payment due date, although some lenders allow a grace period (typically between three and 15 days after your due date) before charging it.

To avoid late fees, consider setting up payment reminders or automatic payments via ACH debit, which authorizes lenders to deduct the loan payment directly from your bank account. Lenders may also be willing to waive a late fee if you request it.

Prepayment fee: While this fee is uncommon on personal loans, some lenders may charge it for paying off the loan early, either with your own money or through a loan refinance.

Insufficient funds fee: Also called an overdraft fee, this may be charged (on top of a late fee) if you’ve signed up for autopay, but don’t have enough cash in your bank account to cover the loan payment. Consider setting up an alert with your bank if your balance falls below the monthly payment amount.

How much will your loan cost?

The rate you receive on a personal loan depends heavily on your credit score. The better your score, the lower your rate and the less interest you'll pay over the life of the loan. Use our personal loan calculator to see estimated APRs and payments for a personal loan based on your credit score.

How to pre-qualify for a personal loan

Pre-qualifying for an online loan can get you access to potential loan terms, including the loan’s interest rate. You can pre-qualify with multiple lenders on NerdWallet to compare offers and find the lowest rate.

Last updated on September 16, 2020

Methodology

NerdWallet's ratings for personal loans award points to lenders that offer consumer-friendly features, including soft credit checks, no fees, transparency of loan rates and terms, flexible payment options, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider the number of complaints filed with agencies like the Consumer Financial Protection Bureau. This methodology applies only to lenders that cap interest rates at 36%, the maximum rate financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation of any sort for our reviews.

To recap our selections...

NerdWallet's Best Personal Loans With No Origination Fee 2020