Commitment Fee

A commitment fee is an amount charged by a lender or a broker to you, the borrower, in exchange for processing and guaranteeing a loan for future use. As the lender or broker is essentially investing their time and resource into helping you obtain a loan as such they may charge a commitment fee to avoid potential borrowers wasting their time.

A committment fee is usually a fixed sum held on account that will go towards the fees of the loan should it be taken out by the borrower or forefeited should the borrower not proceed with the loan.