The deduction mechanism
If you borrow $10,000 with a 5% origination fee, you receive $9,500 in net cash but repay interest on the full $10,000. When comparing loans, always base your budget on net disbursed proceeds rather than headline principal.
Fees
How an origination fee changes personal loan comparisons
An origination fee deducted from loan proceeds reduces the cash you take home while leaving you responsible for interest on the full amount. How to calculate net funding.