How do the marketplace lenders make?
Peer to peer marketplaces typically make money in two ways:
Borrower Origination Fees – every borrower pays a fee if their loan is successfully originated. The fee typically ranges from 1-6%, dependent on the credit quality of the borrower and the type of loan they are requesting.
Investor Service Fees – each time the marketplace processes monthly payments to distribute to investors, they typically deduct a 1% service fee for each payment.