Loan Application Fee Definition

A loan application fee is a charge assessed at the time of the loan application and putatively used to defray the costs associated with the processing of the application. Whether the loan is approved or denied, the loan application fee is assessed. When the fee is assessed as part of a mortgage it is usually called an origination fee and is nearly always expressed as a percentage of the mortgage amount.

Consumers should be aware that origination fees are often stated as "points" rather than percentages; however, a point equates to a percentage, so if you are paying 3 points on a $100,000 loan you will be paying a loan application fee of $3,000.