Worried about hidden loan fees? Borrowing money can be expensive, which is why it’s important to know what you’re getting into.
At KingCash, we want to make sure you have all the information you need before you take out a loan. That’s why we list our fees upfront and don’t charge any surprise costs.
You can trust us to be honest and straightforward about our fees. We never want our borrowers to feel taken advantage of, so we make sure there are no hidden surprises when you work with us. We’re here to help, not harm.
Read on to learn more about some of the loan fees you could be exposed to:
What Are the True Costs of My Proposed Loan?
Before you apply for a loan, it is important to understand all of the costs. This includes the interest rate and any loan origination fees. There may also be other miscellaneous fees that can vary from lender to lender.
So it is important to shop around and not be afraid to ask questions.
And don’t be afraid to negotiate. Many lenders are willing to waive or reduce fees if they think they might lose your business.
The bottom line is that you should not sign on the dotted line until you understand all of the associated fees with your loan. Otherwise, you could end up paying more than you expected.
Here’s What You Need to Know About Loan Fees:
Unfortunately, many people don’t take the time to learn about loan fees before they apply for a loan – and that can be a costly mistake. You need to be sure to factor them into your overall cost calculation.
1. Origination Fee
When you get a loan, there are different types of fees you may have to pay. The most common type of fee is called an origination fee. This is a fee that the lender charges for processing your loan principle application.
This fee usually costs a percentage of the total loan amount, and it can be anywhere from 1% to 8%. For example, if you take out a $10,000 loan with a 5% origination fee, you’ll have to pay $500 in fees.
Apart from the origination fee, you might also have to pay other fees like an application fee or a late payment fee.
Make sure to ask your lender about all of the possible fees before agreeing to take out a loan.
When you take out a loan, you may be charged points. Points are fees that equal 1% of the loan amount.
So, if you’re taking out a $10,000 loan with two points, you’ll pay $200 in fees. Some borrowers choose to pay points to lower their interest rates.
Others decide to save on upfront costs by not paying points. Ultimately, it’s up to you to decide whether or not paying points makes sense for your situation.
3. Appraisal Fee
When you take out a home equity loan or line of credit, the lender will require an appraisal of your home’s value. This fee can range from $50 to $600, depending on the size and location of your home.
The appraisal is important for the lender to determine how much equity you have in your home. Equity is the portion of your home’s value that you own outright, free and clear of any loans or mortgages.
For example, if your home is valued at $200,000 and you have a mortgage balance of $150,000, you have $50,000 in equity. The more equity you have in your home, the easier it is to qualify for a home equity loan or line of credit.
4. Credit Report Fee
Your credit report is important to lenders when you want a loan. This document has information about your credit score and how you have paid bills in the past.
The fee for getting your credit report is about $30. It’s important to remember this fee when you are thinking about taking out a loan. Other fees might be charged, too, so it’s important to add this up when budgeting.
5. Loan Insurance Premium
Loan insurance premiums are a type of insurance that helps protect the lender if the borrower cannot repay the loan. This can help the lender reduce their losses if something happens.
It will also make them more likely to lend money again in the future.
For borrowers, this may not be an enjoyable expense, but it can help to keep borrowing costs down in the long run.
6. Prepayment Penalty
Some lenders discourage people from paying off their loans early by charging a prepayment penalty. This fee is typically 1%-5% of the outstanding loan balance, which can add up to a lot of money.
So, borrowers need to think about whether it’s worth it to pay off their loan early, taking into account the cost of the penalty. In some cases, it might make more sense to keep making regular payments until the loan is paid off in full.
7. Late Payment Fees
If you don’t make your loan payments on time, your lender may charge you a late fee. This fee is meant to cover the cost of processing the late payment and to punish the borrower for not meeting their obligations.
If you’re struggling to make your personal loan payments on time, it’s important to contact your lender as soon as possible. They may be able to offer alternative payment options or extend the due date of your payments.
8. NSF (Non-sufficient Funds) Fee
If you don’t have enough money to cover a purchase, your card might be declined. This is called an NSF, or non-sufficient funds, fee. Most banks charge $20-$30 for an NSF fee.
So if you’re trying to buy something that costs $100 and you only have $80 in your account, the bank will decline the transaction and charge you an NSF fee.
This can add up quickly, so it’s important to make sure you have enough money in your account to cover all of your transactions.
Ready to Get Some Help?
Applying for a loan can be overwhelming, but at KingCash we are here to help. When you take out a loan with us, there are no hidden loan costs, fees or charges- what you see is what you get.
Loan costs may include loan interest and origination fees, which we will always transparently disclose to you upfront.
Although it’s important to be aware of all the potential costs associated with taking out a loan, at KingCash you can rest assured that there will never be any surprises.
For more informative articles like this one, be sure to check out our blog!