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How Personal Loan Origination Fees Affect the Cash You Actually Receive

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A personal loan origination fee is an upfront charge some lenders deduct from your loan proceeds, so the cash you actually receive can be lower than your approved loan amount even though you generally repay interest on the full principal. Understanding that difference can help you avoid a funding shortfall and compare loan offers more accurately. When you're approved for a personal loan, you might expect to receive the full amount listed in your loan offer. That's a reasonable assumption, but it isn't always accurate. Some lenders charge origination fees that are deducted before funds are disbursed. This means the amount you agree to repay, your loan principal, may be higher than the amount actually deposited into your account. For consumers comparing personal loans with or without origination fees, borrowing to cover a specific expense, or using a loan to consolidate existing balances, that difference can determine whether the loan provides enough usable funds to accom...
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APR vs. Interest Rate on a Personal Loan: Which Number Should You Compare?

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APR and interest rate both describe the cost of borrowing money, but they answer different questions. Interest rate shows what you're charged on your outstanding balance, while APR adds certain finance charges, like loan origination fees, to show a more complete annualized cost. When comparing personal loan offers, APR is generally the more useful starting point, but your interest rate, repayment term, and total cost still deserve a close look. In our previous article, we walked through seven numbers that matter [1]   when comparing personal loan offers. Two of the most important—and most commonly confused—are the interest rate and the annual percentage rate (APR). These terms often get used interchangeably, but they don't necessarily represent the same borrowing cost. When comparing personal loan offers, you may notice that each one lists both an interest rate and an APR. At first glance, the numbers can look nearly identical. In some cases, they are. In others, the gap b...
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