6 Best Personal Loans With No Origination Fee of January 2024

Best personal loans with no origination fees

Before you take out a personal loan, it’s important to compare multiple lenders that meet your requirements. This way, you can find the right loan for your needs — such as a loan without an origination fee.

Here are Credible’s partner lenders that do not charge origination fees on personal loans:

Lenders that may not charge origination fees

Some lenders only offer no-origination-fee loans to certain borrowers. Here are Credible’s partner lenders that may not charge an origination fee, depending on your income, credit, and other factors:

What is an origination fee?

A loan origination fee covers the costs of processing your application, underwriting the loan, funding it, and other associated administrative services.

Personal loan origination fees generally range from 1% to 12% of your loan amount, depending on the lender and your financial profile. For example, if you took out a $5,000 loan with a 5% origination fee, you’d pay a $250 origination fee.

It’s possible to find lenders that don’t charge origination fees, especially if you have good credit and a solid income. But if you have a low credit score, it’s more likely you’ll need to pay an origination fee.

Some lenders charge a flat origination fee, regardless of credit profile, while others have a range — for example, a personal loan from Upgrade could come with an origination fee from 1.85% to 9.99%. The actual fee the lender charges will depend on several factors, including your credit and income.

What is APR?

A loan’s annual percentage rate (APR) is an expression of how much the loan costs, based on its interest rate and any origination or other upfront fees. It’s important because it gives you a true sense of the cost of loans, and a more effective way to compare them side by side, relative to the interest rate alone.

For example, a five-year loan with a 10% interest rate and a 5% origination fee, would have a 12.2% APR. (The APR stays the same regardless of loan amount, but will change with the loan’s repayment term.)

Methodology

To find the “best companies,” Credible looked at loan and lender data points from 10 categories to give you a well-rounded perspective on each of our partner and non-partner lenders. Here’s what we considered:

• Interest rates
• Repayment terms
• Repayment options
• Maximum loan amount
• Loan funding time
• Fees
• Discounts
• Customer service availability
• Whether the minimum credit score is available publicly
• Whether consumers could request rates with a soft credit check

Learn More: Low-Income Loans: Personal Loans for a Tight Budget

Other personal loans to consider

Here are other lenders that stand out for having no origination fees. Keep in mind that these lenders aren’t Credible partners, so you won’t be able to easily compare your rates with them on the Credible platform like you can with the lenders above.

Other personal loan fees to consider

In addition to origination fees, personal loans may have other costs, depending on the lender. Some potential fees include:

• Application fees: Some lenders charge these when you apply for a loan, before you get an approval decision. This type of fee can range from $25 to $50.
• Late fees: Lenders assess these if you make a past-due payment. On average, late fees can range from $25 to $50, or from 3% to 5% of the monthly payment amount.
• Returned check fees: Lenders may charge these if you make a loan payment that’s returned for insufficient funds. These typically range from $20 to $50.
• Payment protection insurance: This is a type of insurance that can help cover your loan payments if you’re unable to work. Not all lenders offer payment protection insurance (PPI), but those that do might encourage you to sign up — keep in mind that it isn’t required, and it’s usually not necessary if you have a life insurance or other policy that offers similar protections. If you opt to get PPI, you’ll typically pay at least 1% of your loan amount. Be sure to closely read any fine print to make sure you’d be eligible for coverage and so you know exactly what would be covered, and for how long.
• Prepayment penalties: Few lenders assess these if you pay off your loan ahead of schedule (no Credible partners do). While these are relatively rare, if a lender does charge them they could cost you 2% to 5% of the loan amount or a flat fee. 

You can estimate how much you’ll pay for a loan using our personal loan calculator.

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How to take out a no-origination-fee personal loan

If you’re ready to take out a personal loan, ideally with no origination fee, follow these four steps:

1. Research and compare lenders: Look for personal loan lenders that offer loans for the amount you need and the term you’re aiming for, with eligibility requirements you can meet. If you need funds quickly, be sure to take a lender’s funding time into account. If you’re looking to avoid origination fees, limit your search to lenders that don’t charge them. Then, if it is offered, prequalify with the lenders that seem the most promising. This can give you an idea of the annual percentage rates (APRs) and terms you may qualify for, without affecting your credit score. Just remember that prequalification is not an offer of credit, so your final rate may differ. When you proceed to formally apply for a loan, the lender will conduct a hard credit pull that will temporarily drop your score by a few points. 
2. Pick a loan option: After you’ve done your lender research and prequalified, where possible, choose the loan option and lender that looks like it will best suit your needs.
3. Complete the application: Once you’ve chosen a lender, fill out a full application and submit any required documentation, such as tax returns or pay stubs. It is at this point that the lender will conduct a hard credit inquiry that will ding your score slightly. Feel free to apply for more than one personal loan (just be sure to do so within a two-week time frame to avoid any additional hit to your credit).
4. Get your funds: If you’re approved, the lender will have you sign for the loan so your money can be released to you. Some lenders will fund loans as soon as the same or next business day after approval, while some lenders can take up to a week. 

Learn More: Best Personal Loans for Fair Credit

How to keep personal loan costs low

Although you might be able to get a personal loan with no origination fee, you’ll still pay interest on your loan. Interest is essentially the cost of borrowing money and is the main factor that affects your total repayment costs.

However, a few strategies could help you keep your personal loan costs as low as possible:

Have good credit

To get the best personal loan rates, you’ll typically need good to excellent credit. A good credit score is usually considered to be a FICO score of 670 or higher. Several lenders offer personal loans for bad credit, but these loans usually come with higher interest rates and more fees (such as origination fees) compared to good-credit loans.

Lenders will consider your credit score to determine your rate. In general, the higher your credit score, the better your interest rate is likely to be, the lower your chances of paying a high origination fee, and the less you’ll pay overall on your loan.

Several strategies could help you build your credit and qualify for better rates in the future.

For example, you might be able to improve your credit over time by making on-time payments on all of your bills, paying down credit card balances, or taking out a credit-builder loan.

Apply with a cosigner

If you have bad credit, applying with a cosigner who has good credit could make it easier to get approved for a loan with no origination fee. Not all lenders allow cosigners on personal loans, but some do — including a few no-origination-fee personal loan lenders like PenFed.

Even if you don’t need a cosigner to qualify, having one could get you a better interest rate than you’d get on your own — which could help you keep your overall costs lower.

Choose a shorter repayment term

While picking a longer repayment term could get you a lower monthly payment, you’ll also pay more in interest over time. Because of this, it’s usually a good idea to choose the shortest term you’re sure you can afford — this way, you can keep your interest costs as low as possible. Many lenders also offer better rates to borrowers who opt for shorter repayment terms.

Compare lenders

Taking your time to shop around and compare lenders can help you find the most cost-effective loan for your financial needs (and avoid origination fees, if that’s your goal). In addition to the APR, be sure to consider repayment terms and any fees the lender charges, as well as funding times and eligibility requirements.

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