Course: Why businesses borrow money
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