Low Origination Fee
- Usually charged as a minimal percentage of the total loan
- Some lenders can also charge a flat sum of money instead of a percentage
- Do not pay more than 1%!
Low Origination Fee
Origination fee is something that you will come across a lot when looking for information about loans. Thus, it is better that you know what it means and why you should put it into account before you go looking for a loan. Almost all loans will have an origination fee. A few may not have, as their vendors say, but at the end of the day, there will be another hidden charge that could be equal, or almost equal, to the origination fee.
Every loan has a cost, and the origination fee is one of these costs. When calculating the total cost of the loan, you had better include every cent that you will pay for the loan. At Liberty Capital Group, we bring you lenders with low origination fees. If we should find lenders that have no origination fee in place, then we bring those to you as well.
It means no upfront payment, no deposit!
When you take $0 down payment loan, it means that you are not making any up-front payment when you are buying any business equipment. In other words, you are not bringing any cash savings to the table. You don’t pay any portion of money, but you borrow 100%.
Zero down payment offers to give you an opportunity to take business equipment loan even if you don’t have any cash savings. The only downside of this offer is that you will end up paying more in the end. But what is the need of avoiding paying more and remaining stuck for decades or for the rest of your life. You would rather pay more if it will help you in the end.
For a lender to lend you money without you making any down payment you must have an excellent credit rating. A high credit score is a guarantee that you are a responsible person. The credit score number can speak on your behalf when you are seeking such loan. If you are planning to start or expand a business and you don’t think you can be able to save sizable money to pay as a down payment, then start building your credit score today.
So what is an origination fee?
Before 2008, the origination fee of 1 to 6 percent would be charged, which was quite high.
Some lenders can also charge a flat sum of money instead of a percentage of the total amount. In addition to the origination fee, you should be aware of other charges accompanying loans. For example, the closing charges, underwriting fees and service charges all contribute to how costly or affordable a loan is.
Lenders figure the time and resources needed.
The lender figures that whether you borrow a high or low amount of money, the time and the resources needed to process the loan are just about the same. Therefore, for a small loan amount, they may charge you a higher origination fee.
Bargain for a smaller origination fee
Still, there is a way that you can get a small origination fee than what is being touted by the lender. If you are borrowing a large amount of loan, you should bargain for a smaller origination fee. You should never take the “standard rate in the market” slogan. There is always room for discount and you can imagine just how much money people lose just because they do not ask for discounts.
The origination fee may be small, but it makes a difference.
Thus, you should ask the lender whether they charge this fee. If they do not, well and good. If they do, compare their price to that of the other lenders in the market until you get the right one. Many years ago, the origination fee was considered as the payment for the lenders. Thus, the lenders would devise notorious ways of raising the fee. For example, they would target people with bad or no credit and sell them the loan at a high origination fee. However, this practice was reined in leaving the fee for origination of loans set at 1% or less.
Today, you need not pay more than 1%
You need not pay more than 1%, but then, that differs from one lender to another. Also, if you have good business and personal credit, you will get low or no origination fee with your loan. If you lack good credit, you may attract a high origination fee.
Some loan sources have no origination fee
SBA loan
One of the sources for business loans that does not charge any origination fee is the SBA loan. There are no charges for this loan as long as you are borrowing at less than $150,000. However, under any SBA program, the loans are given out in support of the small businesses and they are guaranteed by the government anyway.
How are the interest rates?
The secret therefore to a good business loan is not only to consider the origination fee that you are being charged but the interest rate as well. If the lender claims to charge no origination fee, ask yourself what they are making you concede in its stead. How are the interest rates? Are there any other hidden charges?
You need a resource center
To find loans with the lowest or no origination fee, you will need help. You need a resource center such as; we bring you here at Liberty Capital Group to help you get all manner of business loans. We would advise you to build your personal and business credit history in order to attract the best rates when you borrow a loan.
You only pay the origination fee if the loan application goes through.