Also called: Documentation fee, Application fee, Doc fee
Establishment fee
An establishment fee is a one-off charge made by a lender at the start of a facility to cover setting up and documenting the loan. It may be paid upfront or capitalised into the amount financed, and it is included in a comparison rate for regulated consumer credit.
What is an establishment fee?
An establishment fee is a one-off charge made by a lender at the start of a facility to cover setting up and documenting the loan. It may be paid upfront or capitalised into the amount financed, and it is included in a comparison rate for regulated consumer credit.
Example
A $60,000 equipment loan with a $495 establishment fee and a $4.95 monthly account fee adds roughly $792 in fees over five years.
Why it matters
A low advertised rate with a heavy establishment fee can be dearer overall than a slightly higher rate with none.