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Loan Origination Cost Calculator

Work out loan origination cost instantly with clear inputs, formula shown and shareable results.

About Loan Origination Cost Calculator

Origination cost per loan is the fixed cost of underwriting, spread over the loans written. Amortising it over the average tenor gives the minimum spread the loan must earn before it covers the cost of being written at all.

Formula

Origination economics

Cost per loan = annual cost / loans; break-even spread = cost share / tenor

Worked example

With the default values below, Loan Origination Cost Calculator returns Origination Cost Per Loan of $4,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual Origination Costminimum 0
48,000,000
Loans Originatedaccepts 1–10,000,000
12,000
Average Loan Sizeminimum 0
450,000
Average Tenor In Yearsaccepts 0.5–30
4

Results

Origination Cost Per Loan
$4,000.00
Cost As Share Of The Loan Amount
0.8889%
Spread Needed To Recover It In Basis Points
22.2
Total Annual Origination Cost
$48,000,000.00

Step by step

  1. 1Values used
  2. 2Origination economics
  3. 3Origination Cost Per Loan= 4,000.00
  4. 4Cost As Share Of The Loan Amount= 0.8889
  5. 5Spread Needed To Recover It In Basis Points= 22.2
  6. 6Total Annual Origination Cost= 48,000,000.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation or tax into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.

Frequently Asked Questions

Why does average ticket size matter so much?

Because origination cost is largely per-file, not per-unit. Small loans carry a punishing cost ratio.

How is the cost reduced?

Automated underwriting and digital onboarding cut the per-file cost, which is why small-ticket lending has moved online.

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