Origination fees are an upfront cost deducted from the loan amount, but not all lenders charge this fee. We evaluated leading personal loan lenders and identified the best personal loans without origination fees based on their rates, loan amounts, repayment options, and customer service ratings.
- Best for borrowing small amounts: PNC
- Best for large loan amounts: Wells Fargo
- Best for debt consolidation: Discover
- Best for low rates: LightStream
- Best for credit union benefits: PenFed
- Best for members: Alliant Credit Union
- How do personal loans without an origination fee work?
- When is a no-origination-fee personal loan a good idea?
- Alternatives to personal loans
Best for borrowing small amounts: PNC
Why a PNC personal loan stands out: Some lenders require you to borrow $5,000 or more, but PNC offers loans starting at $1,000. If you need to borrow a relatively small amount to cover a car repair or other minor emergency, the lower loan minimum prevents you from unnecessarily taking on too much debt.
Pros
- Lower-than-usual loan minimum
- Co-applicants allowed
- Short loan terms available
Cons
- Not available in all states
- Must be enrolled in PNC online banking to apply online
- Relatively low loan maximum
Read reviews of PNC personal loans to learn more.
Best for large loan amounts: Wells Fargo
Why a Wells Fargo personal loan stands out: Most personal loan lenders cap their loans at $50,000 or less. By contrast, Wells Fargo has a much higher loan maximum of $100,000, so you can borrow enough money to fully cover the cost of a new swimming pool or kitchen renovation. Plus, you can have up to 84 months to repay the loan.
Pros
- Higher-than-usual loan maximum
- Loan terms as long as 84 months
- Quick loan disbursements for most borrowers
Cons
- Must be a Wells Fargo customer for at least 12 months to qualify for a loan
- No option for co-applicants
- No direct creditor payments
Read reviews of Wells Fargo personal loans to learn more.
Best for debt consolidation: Discover
Why a Discover personal loan stands out: Discover is one of the few lenders that offers direct creditor payments for borrowers consolidating their debt, eliminating the need for you to manually pay each creditor. This perk may help reduce the temptation to spend loan funds on unnecessary purchases so you can focus on paying down your debt.
Pros
- Allows direct creditor payments
- Loan terms as long as 84 months
- Discover has repayment assistance programs for those facing financial hardships
Cons
- Lower-than-usual loan maximum
- Does not allow co-applicants
- Shortest loan term is 36 months
Read reviews of Discover personal loans to learn more.
Best for low rates: LightStream
Why a LightStream personal loan stands out: For borrowers with good to excellent credit, LightStream boasts lower-than-average rates. And depending on your intended loan use, you can have anywhere from 12 to 144 months to repay your loan, the longest of any lender we evaluated. LightStream also has a “Rate Beat” program. If you’re approved for a qualifying loan with another lender that is lower than LightStream’s rate, LightStream will beat it by 0.10 percentage points.
Pros
- Higher-than-usual loan maximums
- Longer loan terms available
- Allows co-applicants
Cons
- No prequalification option
- Loan terms vary by intended use
- Only borrowers with good to excellent credit accepted
Read reviews of LightStream personal loans to learn more.
Best for credit union benefits: PenFed
Why a PenFed personal loan stands out: Credit unions are nonprofits that can often offer lower rates than banks, and PenFed’s membership is open to the general public. PenFed allows co-borrowers, so people who don’t have great credit can apply with another person to better their chances of qualifying for a loan.
Pros
- Loan amounts as low as $600
- Allows co-borrowers
- Credit union membership is open to the public
Cons
- Cannot check loan rates without becoming a member
- Charges a $29 late fee
- Maximum loan term is 60 months
Read more about PenFed personal loans.
Best for members: Alliant Credit Union
Why an Alliant personal loan stands out: As a credit union, Alliant offers competitive rates, but it also allows borrowers to take out up to $100,000. Alliant members who qualify for a loan can receive loan funds as soon as the same day they apply.
Pros
- Typically same-day loan disbursement
- Higher-than-usual loan maximum
- Debt protection plan available
Cons
- Must be a member for 90 days to apply
- Limited loan term options
- No loan prequalification option
How do personal loans without an origination fee work?
Borrowers can qualify for personal loans without origination fees from some lenders. When you apply for a personal loan, you receive the exact amount you applied for, making it easier to budget and plan for home improvements or emergency repairs.
That process is different from personal loans that have origination fees. With these loans, the lender charges a one-time upfront fee, which is typically deducted from the requested loan amount when it’s disbursed. For example, if you take out a $10,000 loan with a 5% origination fee, you pay the lender $500 in fees and receive $9,500 in loan funds. But you’re still responsible for repaying the original $10,000 (plus interest).
Typically, personal loans without origination fees are available to borrowers with good to excellent credit. If you fit that credit profile, shop around and compare rates and fees to find the best loan.
When is a no-origination-fee personal loan a good idea?
A no-origination-fee personal loan is a useful tool if you have good to excellent credit and need an exact amount for a specific purpose, such as a new appliance package or landscaping project. A personal loan without origination fees gives you the money you need, and you don’t need to worry about losing hundreds straight off the top to fees.
They’re also a good option if you plan on paying off your debt quickly. Some lenders that charge origination fees may offer lower interest rates, so if you have a longer loan term, you may benefit from paying a lower rate but higher origination fee since you’ll pay less in interest over the life of the loan. By contrast, the no-fee personal loan with a higher interest rate may be more cost-effective if you pay off the loan within a year or two.
A personal loan without an origination fee may not be an option if you have fair or poor credit. Lenders that don’t charge origination fees often look for borrowers with strong credit profiles, so you may not qualify for a loan without an origination fee.
Alternatives to personal loans
Taking out a personal loan without an origination fee is just one way to manage your finances. Depending on your goals, one of these alternatives may be a better fit:
- Follow the debt avalanche method — If you’re focused on paying down debt, the debt avalanche is a strategy that targets your highest-interest debt first. Over time, this approach will help you pay down debt and save money faster.
- Buy now, pay later — If you need to make a large purchase, such as a laptop or furniture, you can use a buy now, pay later app to split up the purchase price into installments that you pay over several weeks or months.
- Transfer your balance — If you have good credit, you may qualify for a balance transfer credit card. This tool allows you to move the balance of your other credit cards to one with a 0% introductory APR for a specific period, such as 12 to 18 months. The introductory APR gives you time to pay down the balance without interest.
- Meet with a debt counselor — If you feel like your debt is out of control, meet with a nonprofit debt counselor. The counselor will review your accounts, talk with you about your finances, and help you create a budget and debt repayment plan.
Our methodology: How Credit Karma rates personal loans
Credit Karma’s editors evaluate personal loans by reviewing key features and how they compare to other popular lenders. Those features fall into the following three categories:
- Affordability — We start by checking if a lender’s rates are competitive: Are they higher than average, or are they lower than many competitors? Then, we analyze if fees — particularly origination fees — may make your loan more costly. Last, we’ll check if the lender offers rate discounts for things like automatic payments that may reduce your rate.
- Customer-friendly features — Taking out a personal loan is a big financial commitment, so we prioritize lenders that make things easier for you. For instance, does a lender offer a wide range of loan amounts for people with different borrowing needs? Does it offer at least several loan terms to give you more flexibility with your monthly payment? And, crucially, can it fund your loan quickly? A lender will also get bonus points for offering direct payments for debt consolidation or other customer-friendly features.
- Transparency — We believe personal loan terms should be easy to find and decipher. Prequalification, which lets you check what rate you may qualify for without a hard credit inquiry, is particularly important. We also check to see if a lender has been recently penalized by regulators.
Estimate personal loan costs
To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.
FAQs about personal loans with no origination fee
No, not all personal loans have origination fees. Many banks and credit unions offer loans without origination fees, particularly to borrowers with good to excellent credit.
A 10% origination fee on a personal loan is on the higher end of the typical range. Before taking out a loan with such a high fee, consider the loan’s interest rate and shop around to compare quotes from several lenders.
When deciding whether to take out a personal loan with an origination fee, only take out the loan if the overall APR is lower than your other options. Sometimes, a loan with a small origination fee has a lower overall cost than other loan options.
The lender deducts the origination fee from the loan amount when it disburses the loan funds. You repay the full, original amount through your monthly installment payments.
*Approval Odds are not a guarantee of approval. Credit Karma determines Approval Odds by comparing your credit profile to other Credit Karma members who were approved for the personal loan, or whether you meet certain criteria determined by the lender. Of course, there’s no such thing as a sure thing, but knowing your Approval Odds may help you narrow down your choices. For example, you may not be approved because you don’t meet the lender’s “ability to pay standard” after they verify your income and employment; or, you already have the maximum number of accounts with that specific lender.