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4 Best Personal Loans With No Origination Fee

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

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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.

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.

  • 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.

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 January 4, 2021

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