Some personal loans have fees. The two most common fees personal loans have are origination fees and prepayment penalties, although there are many personal lenders that don’t have either.
Origination fees may be a set dollar amount or a percent of the loan principal, and most lenders allow the origination fee to be deducted from the loan proceeds. In other words, if you borrow $10,000 with a $200 origination fee, $9,800 will be deposited into your bank account.
Prepayment fees aren’t terribly common, but are important to know about. Some personal lenders charge a prepayment penalty if a borrower pays off a loan more quickly than the agreed-upon term. However, most online lending marketplaces like Upstart do not have prepayment penalties.
Are credit cards or personal loans worse for credit?
