Private Loan Fees in Costa Rica: What Borrowers Pay

Understanding private loan fees in Costa Rica before you sign is one of the best ways to avoid surprises. The loan amount on paper is rarely the cash you receive: fees, the payoff of any existing mortgage, and the terms for early repayment all affect what a loan really costs. The good news is that a well-structured loan puts every cost in writing before closing.

This guide explains who pays the fees, how they affect the cash you receive, and what to ask for in writing. It is general information, not legal or financial advice.

Who Pays the Fees

With GAP Equity Loans, borrowers pay all loan fees, and the fees are deducted from the loan proceeds at closing. For GAP’s standard property-backed loans, there are no costs for the borrower to pay before closing. Lenders receive the full agreed interest rate without GAP’s loan fees taken out of it, which is one reason the fees sit on the borrower’s side of the transaction. There is no fixed fee percentage that applies to every loan; the amount depends on the individual transaction and is explained during loan review.

How Fees Affect the Cash You Receive

Because fees are deducted from the proceeds, the cash you receive is less than the loan amount. Ask GAP for your exact figures before you commit, so you know how much cash you will receive. If the property has an existing mortgage, paying it off at closing reduces the cash you receive further.

Fees vs. Interest

Fees and interest are different costs. Interest is paid during the term: GAP loans use interest-only payments, with the principal repaid at maturity. Fees are deducted once, at closing. To compare offers fairly, look at the total cost over the life of the loan, including both interest and fees, rather than the interest rate alone. Costa Rican law also sets a maximum annual interest rate for financing, published by the Central Bank of Costa Rica.

Early Repayment Penalties

Paying a GAP loan off early carries a penalty. The amount and conditions depend on the lender and are explained during loan review, so ask how the penalty works before you sign, especially if you expect to sell or refinance before the loan matures.

What to Get in Writing

Before you agree to any private loan fees in Costa Rica, ask for these details in writing:

• The loan amount and the interest rate
• Every fee, and how it will be deducted from the proceeds
• The amount needed to pay off any existing mortgage
• The cash you will receive at closing
• The term, payment schedule, and when the principal is due
• The early repayment penalty
• What happens if a payment is late

Read more about what late payments cost on a Costa Rica loan.

Warning Signs

• Pressure to pay money before you receive clear written terms
• Promises of guaranteed approval before the property is reviewed
• Vague answers about fees or penalties
• Reluctance to let your own attorney review the documents

Also remember that SUGEF registration of a lender is for anti-money-laundering purposes only and is not an authorization to operate.

Frequently Asked Questions

Who pays the fees on a GAP loan?

The borrower pays all loan fees, and they are deducted from the loan proceeds at closing.

Is there a standard fee percentage?

No. Fees depend on the individual transaction and are explained during loan review.

Why is the cash I receive lower than the loan amount?

Loan fees and the payoff of any existing mortgage are deducted from the proceeds at closing.

Can I repay early without a penalty?

No. Early repayment has a penalty, and its amount and conditions depend on the lender.

Do I pay anything before closing?

No. For GAP’s standard property-backed loans, there are no costs to pay before closing. Loan fees are deducted from the proceeds at closing.

This article is general information only and is not legal, financial, or tax advice. Every loan depends on property review, documentation, and lender approval.

WhatsApp us at +506 4001 6413 to get started, or call 855-562-6427 from the US or Canada.

Want a clear picture of your loan costs? Start a loan request, see how it works, or email info@gap.cr.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)