Loan origination fee

A loan origination fee is charged to a borrower when a loan is initially issued. This fee is intended to cover the cost of processing a new loan application, which can include costs related to originating, refinancing, or restructuring a loan. Rather than reimbursing the lender for the actual cost incurred, the fee is typically charged as a percentage of the total loan amount, which means that the lender may earn a substantial profit on the origination fee. It may be possible for a borrower to negotiate the size of the fee being charged.

Related Courses

Corporate Finance 
Treasurer's Guidebook