Letter of Credit Confirmation Fee: What Determines the Price?
The factors that drive the cost of confirming a Letter of Credit, and how to plan for it.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A confirmation fee is what a bank charges to add its own payment undertaking to a Letter of Credit. It is usually a percentage of the credit amount for a period, and reflects the confirming bank's view of the issuing bank and country risk, the tenor, and the amount. Fees vary widely and are quoted by each bank.
| Usually | Percentage of amount per period |
|---|---|
| Driven by | Issuing bank risk, country risk, tenor, amount |
| Who pays | As stated in the credit / agreed in contract |
Price drivers
- Credit rating of the issuing bank.
- Country and transfer risk.
- Length of the credit and usance period.
- Size of the credit.
- Confirming bank's existing limits.
How to plan
- Ask for a quote before agreeing terms.
- Agree in the contract who pays.
- Check field 49 allows confirmation.
Sources
General guidance, not legal advice. Your bank examines documents independently.
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