Most commonly referred to simply as "points", Financing Points are fees associated with obtaining a loan. Points are typically broken down into two categories: origination points and discount points.

• Origination points are money that the financing company charges the borrower as compensation for doing the deal.

• Discount points are paid to reduce the interest rate on the loan/increase the loan's effective yield. These points are paid at closing and generally calculated as one point equal to one percent of the total loan amount.