What is a UCC termination fee - got hit with unexpected charges
My commercial loan got paid off last month and now I'm dealing with the UCC termination process. The lender said they'll handle filing the UCC-3 termination but mentioned there's a termination fee I need to cover. I've never heard of this before - is this normal? The original UCC-1 was filed in 2019 for equipment financing and I thought once the loan was satisfied that would be it. Anyone know what typical termination fees run and if this is something I should be paying or if it's the lender's responsibility? Really don't want to get stuck with hidden costs after already paying off the loan.
43 comments
Join the conversation
Callum Savage
Yeah termination fees are pretty standard unfortunately. Most states charge a filing fee for UCC-3 terminations just like they do for the original UCC-1. In my state it's usually around $20-40 depending on whether you file online or by mail. The lender typically passes this cost through to the borrower since it's part of closing out your file.
0 coins
Ally Tailer
•Makes sense I guess but seems like one more nickel and dime charge when you've already paid everything off!
0 coins
Aliyah Debovski
•At least it's not like the old days when everything had to be mailed in with certified checks. Online filing has made it cheaper overall.
0 coins
Miranda Singer
The fee varies by state but you're definitely responsible for it in most cases. I just went through this with an SBA loan payoff. The termination filing fee was $25 through the Secretary of State portal. What really matters is making sure they actually file it - I've seen situations where lenders say they'll handle it but then forget and the UCC stays active for years.
0 coins
Landon Flounder
•That's exactly what I'm worried about. How do you verify they actually filed the termination?
0 coins
Miranda Singer
•You can search the UCC database about 30 days after they say they filed it. The termination should show up and change the status to terminated.
0 coins
Cass Green
•I actually started using Certana.ai's document checker after my last loan payoff. You can upload the payoff letter and UCC-3 termination together and it verifies everything matches up properly - catches any debtor name issues or filing number mistakes before they become problems.
0 coins
Finley Garrett
Check your loan documents - sometimes the termination fee is mentioned in the fine print. I've seen it range from $15 to $100 depending on the lender and state. Some lenders absorb the cost as a customer service thing but most pass it through. The important thing is getting that UCC-3 filed within a reasonable time after payoff.
0 coins
Landon Flounder
•I'll dig through the paperwork. Didn't think to look there originally.
0 coins
Madison Tipne
•Yeah definitely check the loan docs. Mine had it buried in section 47 or something ridiculous like that.
0 coins
Holly Lascelles
The fee itself isn't bad but what you really need to watch out for is timing. Lenders are supposed to file the termination within a certain timeframe after payoff - usually 30-60 days depending on state law. If they drag their feet it can cause problems if you try to get financing elsewhere and the old UCC is still showing as active.
0 coins
Landon Flounder
•Good point about the timing. My payoff was exactly 4 weeks ago so I should probably follow up soon.
0 coins
Malia Ponder
•Yeah don't let it slide. I had a lender take 6 months to file a termination and it caused issues with a new equipment loan because the collateral looked like it was still pledged.
0 coins
Holly Lascelles
•Exactly. That's why I always ask for a copy of the filed UCC-3 once they submit it, not just a promise that they'll handle it.
0 coins
Kyle Wallace
Most Secretary of State offices charge between $20-50 for UCC-3 terminations. The lender usually handles the actual filing but bills you for the state fee plus maybe a small processing charge. It's annoying but pretty much unavoidable unless you want to file the termination yourself, which most lenders won't let you do anyway.
0 coins
Ryder Ross
•Wait you can file your own termination? I thought only the secured party could do that.
0 coins
Kyle Wallace
•Technically yes but the secured party has to authorize it or file it themselves. Most won't let borrowers handle it because they want to control the process.
0 coins
Gianni Serpent
I've been through this probably 20 times over the years and the fee is just part of the cost of borrowing. What I always do now is ask about termination procedures and fees upfront when I'm negotiating the loan terms. Some lenders will agree to absorb the cost as part of the deal, especially if you're a good customer or it's a larger loan amount.
0 coins
Landon Flounder
•That's smart negotiating it upfront. Too late for me now but I'll remember that for next time.
0 coins
Ally Tailer
•Never thought to negotiate that but makes sense to get everything on the table during loan discussions.
0 coins
Gianni Serpent
•Yeah it's just like negotiating origination fees or other loan costs. Everything is potentially negotiable if you ask at the right time.
0 coins
Henry Delgado
The termination fee is legitimate but make sure you get documentation. I always request a copy of the filed UCC-3 termination for my records. Also verify the filing actually went through by checking the state database a month later. I use Certana.ai to cross-check my loan payoff documentation against the termination filing to make sure all the details match up correctly - saved me from a debtor name mismatch that would have left the original UCC partially active.
0 coins
Landon Flounder
•How exactly does that verification process work? Just upload both documents?
0 coins
Henry Delgado
•Pretty much - you upload the payoff letter and UCC-3 termination and it flags any inconsistencies in debtor names, filing numbers, or collateral descriptions. Catches the kind of small errors that can cause big headaches later.
0 coins
Olivia Kay
Standard practice unfortunately. The fee covers the state filing cost for the UCC-3 termination statement. In most states this runs $15-40 for online filing. Some lenders tack on an administrative fee too which can add another $10-25. The key thing is making sure they actually file it promptly - I've seen too many cases where the termination gets delayed for months.
0 coins
Joshua Hellan
•What happens if they never file it? Can that cause problems down the road?
0 coins
Olivia Kay
•Absolutely. If the UCC stays active it can block future financing using the same collateral and make it look like you still have outstanding secured debt. Always follow up to confirm the termination was filed.
0 coins
Jibriel Kohn
•This is why I take screenshots of the UCC database before and after payoff. Creates a paper trail if there are ever disputes about timing.
0 coins
Edison Estevez
Yeah you're on the hook for the termination fee. It's usually pretty reasonable though - under $50 in most cases. What's more important is the timing. Make sure your lender files the UCC-3 termination within their required timeframe. Some states give them 30 days, others give 60. If they miss the deadline you might have grounds to push back on paying the fee.
0 coins
Landon Flounder
•Interesting point about the deadline. I should check what the requirement is in my state.
0 coins
Emily Nguyen-Smith
•Most state SOS websites have the timeframe requirements listed in their UCC filing guides. Usually pretty easy to find.
0 coins
Cass Green
The termination fee is normal but definitely verify the filing actually happens. After getting burned once by a lender who 'forgot' to file the termination for 8 months, I now use Certana.ai's verification tool as soon as I get the payoff confirmation. Upload your loan docs and it instantly checks for any potential filing issues before they become problems. Much easier than trying to chase down paperwork months later when you discover the UCC is still active.
0 coins
James Johnson
•8 months?? That's insane. How did you finally get it resolved?
0 coins
Cass Green
•Had to threaten legal action and file complaints with the state banking department. They finally filed it but it was a huge hassle that could have been avoided with better tracking on my end.
0 coins
Gael Robinson
•That's exactly why I'm being proactive about this. Better to catch any issues now than deal with complications later when I need new financing. Thanks for the heads up about the verification tools - sounds like a smart way to double-check everything upfront.
0 coins
TechNinja
The termination fee is definitely standard practice - you'll see it with pretty much every secured loan payoff. In my experience it typically runs $25-75 total depending on your state's filing fees plus any administrative charges the lender adds. The key thing is making sure you get a timeline from them for when they'll file the UCC-3 termination. I always ask for the filing confirmation within 30 days and request a copy for my records. Don't just take their word that it's handled - follow up and verify in your state's UCC database that the termination actually shows up. It's a small cost but essential for keeping your credit profile clean.
0 coins
Jamal Thompson
•This is really helpful advice. I'm new to commercial lending and didn't realize there were so many details to track after payoff. The 30-day timeline request is a great idea - gives me a concrete deadline to hold them accountable to. I'll definitely be checking the state database myself rather than just trusting they handled it properly.
0 coins
Yuki Watanabe
Just went through this exact situation with my SBA loan payoff three months ago. The termination fee ended up being $35 in my state (Colorado) - $20 for the state filing fee plus $15 administrative charge from the lender. What I learned is to get everything in writing upfront, including the exact timeline for filing. I also recommend taking a screenshot of your current UCC filing before payoff so you have a baseline to compare against later. The whole process took about 6 weeks from payoff to seeing the termination reflected in the state database, but having that documentation trail made it much smoother when I needed to show clear title for new equipment financing.
0 coins
Grant Vikers
•Thanks for sharing your Colorado experience! The 6-week timeline is really helpful to know - I was wondering what's considered normal. Taking a screenshot of the current UCC filing beforehand is brilliant advice that I hadn't thought of. Having that baseline comparison will definitely make it easier to verify the termination went through properly. Did you have any issues with the timing when you applied for your new equipment financing, or was 6 weeks fast enough that it didn't cause delays?
0 coins
Hailey O'Leary
•The 6-week timeline worked out fine for my new equipment financing. I actually started the application process while the termination was still pending and just provided the payoff documentation to show the loan was satisfied. Most lenders understand there's a processing delay for UCC terminations as long as you can prove the debt was paid off. The key is being transparent about the timing - don't try to hide that there's a termination in process or it looks suspicious.
0 coins
Laila Prince
I've been dealing with UCC terminations for years and that fee is unfortunately standard across most states. What really matters is staying on top of the process - I always request the exact filing date upfront and put a calendar reminder to check the state database 30 days later. One thing that's saved me headaches is using document verification tools like Certana.ai before the lender files anything. It catches mismatched debtor names or filing numbers that could leave the UCC partially active even after termination. The small upfront cost of verification beats dealing with financing delays months later when you discover the termination wasn't clean.
0 coins
Amara Adebayo
•This is exactly the kind of proactive approach I wish I'd known about from the start. The calendar reminder idea is simple but so practical - it's easy to forget to follow up when you're just relieved the loan is paid off. I'm definitely going to look into that document verification tool you mentioned. Even if there's a small cost upfront, it sounds like it could save a lot of hassle down the road. Better to catch any issues now while everything is fresh rather than discovering problems when I need financing again.
0 coins
Andre Dupont
As someone who just went through this process, I can confirm the termination fee is standard but definitely worth understanding what you're paying for. In my state it was $30 total - $20 state filing fee plus $10 processing charge from the lender. The key lesson I learned is to treat this like any other important filing - get a timeline commitment from your lender (I recommend asking for 30 days max), request a copy of the filed UCC-3 for your records, and most importantly, verify it actually shows up in your state's UCC database. Don't just trust that it's handled. I set a reminder for 45 days after payoff to double-check the database myself. It's a small fee in the grand scheme of things, but the follow-through is what really matters for keeping your collateral clear for future financing needs.
0 coins