Start with the amount that reaches your debts
An origination fee is a borrowing cost. How the lender collects it changes the cash available to repay your cards. The CFPB recommends reading the loan disclosures for fees and other charges. Ask for the net amount you will receive, not just the headline loan amount.
Three ways to look at a 5% fee
These examples assume the fee is 5% of the loan principal. They show arithmetic, not a lender’s terms. A lender may use a different fee structure or decline the requested amount.
| Arrangement | Principal | Fee | Money received |
|---|---|---|---|
| Deduct fee from a $10,000 loan | $10,000.00 | $500.00 | $9,500.00 |
| Borrow enough to receive $10,000 | $10,526.32 | $526.32 | $10,000.00 |
| Pay fee separately | $10,000.00 | $500.00 from your cash | $10,000.00 |
Why adding $500 is not enough
If the lender deducts 5% of $10,500, the deduction is $525 and you receive $9,975. To estimate the required principal, divide the needed cash by one minus the fee rate: $10,000 ÷ 0.95 = approximately $10,526.32. The fee rises with the principal. Interest on that larger borrowed amount also affects repayment.
Compare the total without counting a fee twice
For a deducted fee, the larger principal already includes the financed fee. Add all loan payments to find total repayment; do not add that financed fee again. For a fee paid separately, add the upfront cash payment to the scheduled loan payments.
Our calculator asks for the loan’s contract interest rate and the fee separately. A fee-inclusive APR is a different input: entering it as the contract rate and adding the same fee can overstate costs. Use the lender’s disclosures to identify each number; do not guess the contract rate from an advertised APR.
Try both options in the calculator
- Enter your card balances and intended fixed payments.
- Enter the proposed contract rate, term and fee percentage.
- Select “Deducted from loan proceeds” or “Paid separately upfront” to match the actual terms.
- Compare principal, monthly payment, total repayment and required upfront cash.
Estimate the effect of a fee ↗
Ask before signing
Confirm the exact fee amount, when it is collected, the amount disbursed, any other charges and whether early payoff changes what you owe. Keep a copy of the written terms. Our model does not include all possible loan charges or determine eligibility.
Read next: why a lower monthly payment can cost more or the complete consolidation checklist. Corrections: hello@bonusfield.com.