Eli5 ‘How do personal loan companies make money if you pay everything you loaned back,before the first installment date (and no early repayment fee either)?’

Question

Eli5 ‘How do personal loan companies make money if you pay everything you loaned back,before the first installment date (and no early repayment fee either)?’

In: 6

Answer 1

There may be a loan origination fee. But the situation you’re describing is pretty rare. If someone has the money to pay back the entirety of a loan before the first payment date, they likely don’t need the loan and wouldn’t pursue one in the first place.