Origination Fee

An origination fee is a one-time charge a lender applies when you open a loan, typically expressed as a percentage of the amount borrowed, commonly 0% to 2% in Bitcoin-backed lending. It is usually deducted from your loan proceeds or added to your balance at funding.

How it affects your real cost

Because the origination fee is paid upfront but the loan runs over months, it raises your effective APR above the stated interest rate. On a 12-month loan, a 1% origination fee adds roughly 1% to the APR; on a 6-month loan, the same fee adds about 2%, because it is spread over half the time. This is exactly why we compare lenders on APR rather than the interest rate.

Origination fee vs. other costs

Don't confuse the origination fee with the interest rate (the ongoing cost of the loan), the liquidation fee (charged only if your collateral is sold), or a prepayment penalty (charged if you repay early). Some lenders advertise "no origination fee" as a differentiator; Strike and CoinRabbit, for example, charge none.

What to confirm

Ask whether the fee is deducted from proceeds (so you receive less than the face amount) or added to the balance (so you repay more), and whether it is refundable if the loan is cancelled before funding.