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Quick answer
When a percentage fee is deducted from the gross loan, divide the amount you need by one minus the fee rate. To receive $10,000 after a 5% fee, you'd need about $10,526.32. Confirm the lender's fee basis and rounding before relying on the estimate.
Adding 5% to $10,000 produces a $10,500 loan. If the lender withholds 5% of that loan, the $525 fee leaves $9,975, which is $25 short of the debt you wanted to clear.
Check how the lender charges the fee
The fee's payment method and the amount used to calculate it both matter. Consolidation Compare supports these three assumptions:
| Fee treatment | Percentage applies to | What happens |
|---|---|---|
| Pay upfront | The entered debt amount | You cover the fees separately. They count toward total cost but don't increase the borrowed balance. |
| Add to loan balance | The entered debt amount | The calculated fees are added to the loan and accrue interest. |
| Deduct from loan proceeds | The gross loan amount | The calculator increases the loan enough to cover your debts after the percentage fee and any fixed fee are withheld. |
These are modeling options, not interchangeable descriptions of every lender's contract. Choose the one that matches your offer. The deducted option assumes both entered fees are withheld; it doesn't combine a deducted percentage fee with a separately paid fixed fee.
Calculate the loan amount before deductions
(Amount needed for debts + fixed fee deducted) ÷ (1 − percentage fee as a decimal)
For $10,000 of debt, a 5% fee, and no fixed fee, the calculation is $10,000 ÷ 0.95. The unrounded result is $10,526.3158. At $10,526.32, a 5% fee rounded to cents is $526.32, leaving $10,000.
If a $100 fixed fee is also withheld, the starting calculation becomes $10,100 ÷ 0.95. You'd need about $10,631.58: the $531.58 percentage fee and $100 fixed fee leave $10,000 for the debts.
The calculator finds the smallest loan amount in cents that supplies the entered debt amount after rounded deductions. It rounds the deducted percentage fee to the nearest cent, with half-cent amounts rounded up. A lender may use different rounding or restrict loans to larger increments.
Compare the payment and total cost
Here are three ways to model a 5% fee on a loan intended to clear $10,000 of debt. Each example uses a 12% loan interest rate, a 36-month term, no fixed fee, and no extra payments.
| Fee treatment | Loan amount | Monthly payment | Total paid, including fees |
|---|---|---|---|
| Pay upfront | $10,000.00 | $332.14 | $12,457.15 |
| Add to loan balance | $10,500.00 | $348.75 | $12,555.01 |
| Deduct from proceeds | $10,526.32 | $349.62 | $12,586.48 |
The upfront option requires $500 from other available money. The other options borrow the fee, so you also pay interest on it. The deducted option has a slightly higher fee because its percentage applies to the larger gross loan.
Monthly payments are displayed to cents. The model retains the unrounded calculated payment and interest internally, then rounds displayed totals. Actual lender schedules can differ when payments and interest are rounded each month. Enter a quoted payment with the override option if you want to test its payoff timing.
Try the deducted-fee example
Open the example in Consolidation CompareWhat if the approved loan is too small?
The calculator estimates the loan needed to cover all the debts you enter. It doesn't predict approval or assume your lender will increase an offer. If you've been approved for $10,000 with a 5% deducted fee, you receive $9,500 and still have $500 of the original debt to cover.
Check whether you can cover that shortfall from available money, whether the lender can offer a different amount, or whether only part of the debt would be consolidated. Don't treat a full-consolidation result as the cost of a partial consolidation: debt left on the old accounts still has its own interest and minimum payments.
Keep the interest rate and disclosed APR separate
The interest rate drives the loan payment calculation. A disclosed APR can include loan charges as well as interest. Entering that APR as the interest rate and then adding the same fee separately can count part of the cost twice. The CFPB explains the distinction between interest rate and APR.
Use the offer's loan interest rate in Consolidation Compare and enter its disclosed APR in the optional comparison field. Then select the matching fee treatment. For the broader savings test, read Does Debt Consolidation Save Money? or compare the break-even loan interest rate.
What to confirm before accepting an offer
- Gross loan amount: the amount you'll owe before repayments.
- Fee basis: the percentage, fixed charges, and the amount each percentage applies to.
- Net proceeds: what's actually available to pay creditors after deductions.
- Payment and term: the quoted payment, first due date, and repayment length.
- Remaining old debt: any balance, interest, or fees that the disbursement won't clear.
Use current payoff amounts from your creditors when arranging the actual payments. Balances can change while the loan is being processed. The calculator assumes the entered debts are fully replaced and doesn't model that processing delay.
Origination fee questions
Do I pay interest on a deducted origination fee?
When the fee is withheld from a loan whose full gross amount you repay, the payment model charges interest on that gross balance. You receive less than you borrow.
Is adding a fee to the loan the same as having it deducted?
They can both finance a fee, but the percentage basis can differ. In these examples, adding 5% of the debt amount produces a $500 fee; deducting 5% of the gross loan while still funding $10,000 produces a $526.32 fee.
Does a loan with no origination fee always cost less?
No. Compare the interest rate, repayment term, payment, and total cost for the amount you actually need. A fee-free offer can still cost more if its interest rate is higher or repayment takes longer.