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Course: Why businesses borrow money

4 minute read

Are there any other parts of a loan?

Don’t underestimate how much fees can add up. Fees vary widely by lender and can also vary based on credit score, income, principal, assets and liabilities.

Be aware that the following types of fees might be present in your next loan agreement.

 

Late payment fee

Charged as a fixed rate or percentage of the missed payment

 

Insufficient funds fee

Incurred when the borrower doesn’t have enough money in their accounts to cover a loan payment

 

Prepayment penalty

Charged to borrowers who pay off their loan ahead of schedule to protect the lender from lost interest

 

Referral fee

Might be applied if you apply for a loan through a third party

 

Underwriting fee

Covers the lender’s time and expenses associated with the underwriting process, which is used to determine whether you qualify for a loan

 

Wire transfer fee

Incurred if you opt to move funds or make loan payments through a wire transfer