A commitment fee is the fee that is normally charged on a revolving credit agreement.

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A commitment fee is a fee that a borrower pays to a lender to compensate the lender for the time and effort it takes to set up a credit facility, regardless of whether the borrower actually uses the credit. It is commonly associated with revolving credit agreements, where the lender makes a certain amount of funds available to the borrower, but the borrower only uses the funds as needed. The commitment fee ensures that the lender is compensated for the risk and administrative costs associated with having the funds available.

A Commitment Fee Is the Fee That Is Normally Charged