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. It 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 multiplied by the number of days since the borrower’s last payment.
Once a note becomes more than 15 days past due, collections are attempted by a 3rd party collections agency. Investors pay collections agency fees up to 17% on recovered funds up to the total past due amount. For collection accounts more than 120 days past due, investors pay agency fees up to 35% on recovered funds.