COMMITMENT FEE | Logbook Loans Glossary | Autopawn
Commitment fees are small fees that are charged by a lender at the time that a mortgage or other type of loan is extended to an applicant.
The commitment fee serves as a sign that the lender is pledging resources to enter into the business arrangement with the borrower. Depending on the current standards and circumstances that apply, the exact amount of the commitment fee will vary.
When a lender chooses to extend a loan to an applicant, there are a number of ancillary costs that come into play. The lender incurs costs due to the administrative and clerical tasks that are associated with the loan from the time of issue all the way through to the posting of the final payment. A commitment fee is one of the devices utilized by the lender to partially defer those costs.



