4 Best Personal Loans With No Origination Fee

What is a loan origination fee?

A personal loan origination fee covers the lender’s cost of processing the loan and is calculated as a percentage of the loan amount, typically between 1% and 10%. Lenders often deduct the fee upfront from the loan proceeds, but it can also be rolled into the balance.

For example, a $20,000 personal loan can come with a 5% origination fee. You can either pay the 5% origination fee of $1,000, or reduce your loan by the same amount so you receive $19,000 instead.

Often the APR on a loan will include the origination fee, so be sure to read the fee details from your lender to get a clear picture of your costs. And to save money, or get your full loan amount, identify lenders that offer no-origination fee on personal loans.

Bank personal loans with no origination fee

Most banks offer personal loans with no origination fee. You might consider a bank loan if your bank offers lower rates or other benefits for existing customers.

On the other hand, banks typically don't pre-qualify borrowers so applying at a bank for a personal loan triggers a hard inquiry that can temporarily hurt your credit score.

Here are banks that charge no origination fee on personal loans:

• PNC offers a 0.25 percentage point rate discount for customers who sign up for automatic payments from a PNC account. The lender also accepts co-applicants.

• 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.

• TD Bank offers rates similar to other lenders plus fast approval and funding time.

• Truist Bank offers fast funding and the option to add a co-signer.

• U.S. Bank is an option for existing bank account holders, with loans for same-day funding once approved.

Other personal loan fees and charges

Here are other costs, besides the origination fee, to keep in mind when comparing personal loans:

Annual percentage rate: APR is the sum of the loan’s interest rate plus all upfront costs, including origination fee. 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.

Use our personal loan calculator to see estimated APRs and payments for a personal loan based on your credit score.

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 to find the best personal loan

Banks, credit unions and reputable online lenders can provide personal loans when you need emergency funds or quick cash. To find the best option, borrowers should research lenders to find the lowest-cost loan but also a payment plan that works for their budget. Prequalifying for a personal loan can help you assess potential loan terms and APRs to find the best lender.

A local credit union or a bank where you are an existing customer can often offer discounts or lower interest rates on loans. But you may need to visit a branch to complete the loan application. Online lenders can be a convenient way to prequalify, apply and receive funding without leaving your home. But always compare different offers from lenders to find the loan that works best for you.

» MORE: Best online personal loans

How to apply for a personal loan

To apply for a personal loan, you’ll need to complete an application from a lender, provide detailed information on your income and debts and have your credit score assessed. Lenders typically have a minimum credit score requirement and a target debt-to-income ratio.

» MORE: How to get a personal loan