Bad Credit Loan Application fee explained
What is an application fee when applying for a Bad Credit Loans?
An application fee is a type of fee charged by a lender to cover the cost of processing a bad credit loan application and it is generally non-refundable, even if your loan application is ultimately approved. This fee is typically charged by mortgage lenders, but can also be charged by other types of lenders, such as on bad credit loan lenders, auto lenders and student loan lenders. Application fees can vary depending on the type of loan and the lender, but are typically a few hundred dollars.
The application fee can vary depending on the type of loan you are applying for, as well as the lender. For example, applying for a small business loan from a bank may come with a $250 application fee, while applying for a mortgage may come with a $75-$300 application fee.
If you are considering taking out a loan, be sure to ask about any associated application fees so you can factor them into your overall costs.
The fee is typically a flat fee, but may be a percentage of the loan amount
The fee is typically a flat fee, but may be a percentage of the loan amount. The fee may be refundable if the loan is not approved, or it may be applied to the closing costs of the loan.
The application fee is separate from any other fees charged by the lender, such as origination fees, appraisal fees, document preparation fees, and underwriting fees.
Application fees are common with mortgage and business loans but are less common with personal loans.
The fee is used to cover the cost of the lender’s underwriting and processing the loan application
The fee may also be used to cover the cost of a credit report.
The credit report is used by your lender to help determine if you are a good candidate for a loan. A credit report is a record of your financial history that includes information about your credit card balances, payment history, and outstanding debt.
How much is the application fee on a bad credit loan?
The fee is typically a flat fee of $50 – $100, but may be a percentage of the loan amount.
The application fee may be waived if the borrower meets certain criteria, such as signing up for automatic payments or agreeing to have their loan balance paid off early.
The fee may also be waived if the loan is approved.
The amount of the fee varies by lender, but it’s typically a few hundred dollars. Some lenders will waive the fee if you agree to take out a larger loan, or if you meet certain criteria, such as having a good credit score.
What is the refund policy on a Bad Credit Loan?
The refund policy will vary by lender, but the fee is typically non-refundable.
While the application fee is non-refundable, some lenders may offer a credit towards future services if the loan is not approved.
How can I avoid the fee on a Bad Credit Loan?
Some lenders may offer a no-fee bad credit loan option. Signing up for auto-payment might waive the fee also.
Bryan Robinson
Writer and editor
Bryan Robinson is a finance writer with expertise in lending and their interest rates, fees, contracts and more.
Read more about us »
