While there are no fees to open an investment account on Prosper, certain fees payable by borrowers on their loans are netted out of the payments that investors receive on their Notes.
Investors pay an annual loan servicing fee, currently set at 1% per annum of the outstanding principal balance of the corresponding borrower loan prior to applying the current payment. The fee accrues daily, the same way that regular interest accrues on the corresponding borrower loan. The servicing fee amount netted out of each loan payment is calculated by multiplying (a) the outstanding principal of the loan prior to applying the current payment, by (b) the annual loan servicing fee divided by 365, and then multiplying this amount by the number of days since the borrower’s last payment.
Late Fees and Collections Fees
Once a loan is more than 15 days past due, we apply a late fee to the borrower’s account. The late fee is 5% of the loan amount or $15, whichever is greater (unless a lesser amount is required by state law). We pass late fees on to investors, subject to deductions for collections fees.
We refer delinquent loans to one of our third party collections agencies for processing. Investors pay collections agency fees of up to 40% on recovered amounts.
Please note, our COVID-19 relief options include waiving late and non-sufficient funds fees for qualified borrowers. Refer to our Help Center article, "What is Prosper's Response to COVID-19?" for more information.