Definition: A charge associated with processing or creating a loan.
In plain words
An origination fee is a charge for setting up a loan. It is often a percentage of the loan and is usually taken from the money you receive.
Why it matters
If the fee is deducted up front, you get less cash than the loan amount but still repay the full amount. That raises your real cost, which is why APR usually includes it.
Example
Illustrative example: You take a $10,000 loan with an 8% origination fee. The lender keeps $800, so $9,200 reaches your account, but you repay $10,000 plus interest.
Always read the term in the context of your own agreement and local law.
Related terms and guides
APR · Origination and admin fees · Principal