Why am I charged a processing fee for a car loan?

It's bad enough that I have to pay tax on my financed car. What's with the processing fee for the loan?

Answer provided by
Johnny Puckett
Answered on Apr 05, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.
“Many lenders charge some sort of fee to compensate for the cost of processing a loan, based on the reasoning that processing an application takes a fair amount of time, paperwork, and math on their part. Depending on the lender, a processing fee can be a one-time payment or a recurring expense based on a percentage of the loan. “

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