Beware of These Common Tricky Fees in Personal Loans!

personal loan fees

There are a number of reasons why people take out personal loans. However, the most popular ones are usually to consolidate debt or have funding for home or vehicle repairs. Unfortunately, lenders are not the “one size fits all” type. Some have a far less-than-sterling reputation, partially because they have tricky fees—not hidden but not blatantly explained to be necessary—that are nothing more than ploys to get more money from people.

If you’re looking to get a personal loan, beware of these common tricky fees:

For “Application”

Some lenders tend to charge a fee for them to process a loan application. Depending on the lender in question, it can be anywhere from $25 up to $50. It’s a fee that’s usually not returned or refunded even after making a decision not to push forward.

For “Exit”

When borrowers take on a loan, lenders have a tendency to depend on the full repayment term. If there’s intent on the borrower’s end to pay the loan off early, some lenders charge a fee. That’s because loans that take a long time to pay naturally end up with a lot of interest, which is how lenders generally make income off of loans.

Sometimes, the name of the fee is referred to as a “prepayment penalty”; either way, it’s completely unnecessary, and it would be best to find a lender who doesn’t have it at all.

For “Insufficient Funds”

When you fall short on your monthly payments, even if it’s just a couple of dollars, like $5 or $10, there’s a hefty fee from most lenders. As if that’s not enough of a concern, the bank will likely charge an overdraft fee as well. This is unless, of course, your bank offers overdraft protection and you signed up for it.


For “Origination”

When you’re researching loan terms, there’s a possibility you’ll come across ‘origination fee’ charges from the lender. These are particularly sneaky because there are several terms for them, such as:

  • Administrative
  • Disbursement
  • Processing
  • Underwriting

No matter the name, the fee is essentially the same in principle. Or, it would be if there was even a clear definition of exactly what the fees are for. Given the names it goes through, it certainly sounds like a legitimate and necessary charge, until you ask for an explanation. Lenders typically explain it as payment for the effort and time for the loan to be processed in the first place.

This fee is particularly trickier than most, not just because of the name changes. It’s also because a flat fee is charged in some cases, while a percentage of the loan (anywhere from 1% to 8%) is charged in others. Overall, it would be ideal to find a lender that just doesn’t have this charge at all.


Personal loans are fundamentally the same, but lenders vary in the way they’re issued. There are many common tricky fees, which, while not hidden, aren’t properly explained, either. Watch out for these fees allegedly for “application,” “exit,” and/or “origination.”

Need financial help from, loan companies in Anniston, AL that doesn’t charge sneaky and unnecessary fees? Reach out to Calhoun Finance Company today! We’ve served the greater Anniston/Oxford area since 2000.

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